Bill Text: CA AB1551 | 2019-2020 | Regular Session | Chaptered
Bill Title: Property assessments: requirements and disclosures.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2020-09-25 - Chaptered by Secretary of State - Chapter 156, Statutes of 2020. [AB1551 Detail]
Download: California-2019-AB1551-Chaptered.html
Assembly Bill
No. 1551
CHAPTER 156
An act to amend Section 22684 of the Financial Code, and to amend Sections 5898.17 and 5913 of the Streets and Highways Code, relating to property assessments.
[
Approved by
Governor
September 25, 2020.
Filed with
Secretary of State
September 25, 2020.
]
LEGISLATIVE COUNSEL'S DIGEST
AB 1551, Arambula.
Property assessments: requirements and disclosures.
(1) Existing law, commonly known as the Property Assessed Clean Energy (PACE) program, authorizes public agency officials and property owners, as provided, to enter into voluntary contractual assessments, known as PACE assessments, to finance the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently fixed to real property.
Existing law, the California Financing Law (CFL), requires a program administrator who administers a PACE program on behalf of, and with the written consent of, a public agency to comply with specified requirements relating to the PACE program. The Department of Business Oversight is responsible for the licensing and regulation of program administrators.
The CFL prohibits a program
administrator from executing an assessment contract, prohibits any work from commencing under a home improvement contract that is financed by that assessment contract, and prohibits the execution of that home improvement contract, unless the program administrator ensures that certain criteria related to that assessment contract are satisfied.
This bill would include within the criteria that an assessment contract is required to meet that the contract does not contain a penalty for early repayment, and the property that will be subject to the assessment contract is not subject to a reverse mortgage, as defined.
(2) Existing law requires a specific financing estimate and disclosure document to be completed and delivered to a property owner under certain circumstances before the property owner consummates a voluntary contractual assessment for purposes of financing the installation of distributed
generation renewable energy sources or energy or water efficiency improvements, certain seismic safety improvements, electric vehicle charging infrastructure improvements, wildfire safety improvements, or a special tax for community facilities, as specified. Existing law requires the disclosure form to be provided to the property owner as a printed copy unless the property owner agrees to an electronic copy.
This bill would instead require the disclosure to be provided to the property owner as a printed copy in no smaller than 12-point type, unless the homeowner opts out of receiving a paper copy. The bill would require an electronic copy of the disclosure to be provided to a homeowner who opts out of receiving a paper copy.
(3) Existing law requires a program administrator to provide an oral confirmation of the key terms of an assessment contract with the property owner on the call, or the property
owner’s authorized representative, and to retain a copy of a recording of that confirmation for a period of 5 years after the recording is made. Existing law requires that oral confirmation to contain specified information, including that at least one owner of the property has a copy of a specified financing estimate and disclosure form.
The bill would require a program administrator to include in that oral confirmation that the property owner may repay an amount owed pursuant to an assessment contract before the date that amount is due under the contract without early repayment penalty.
The bill would also make nonsubstantive changes.
(4) This bill would incorporate additional changes to Section 5898.17 of the Streets and Highways Code proposed by AB 2471 to be operative only if this bill and AB 2471 are enacted and this bill is enacted last.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 22684 of the Financial Code is amended to read:22684.
A program administrator shall not execute an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed unless the following criteria are satisfied:(a) All property taxes for the property that will be subject to the assessment contract are current. The program administrator shall ask a property owner whether there has been no more than one late payment of property taxes on the property for the previous three years or since the current owner acquired the property, whichever period is shorter.
(b) The property that will be subject to the assessment contract has no recorded and outstanding involuntary liens
in excess of one thousand dollars ($1,000).
(c) The property that will be subject to the assessment contract has no notices of default currently recorded that have not been rescinded.
(d) The property owner has not been a party to any bankruptcy proceedings within the last four years, except that the property owner may have been party to a bankruptcy proceeding that was discharged or dismissed between two and four years before the application date and the property owner has had no payments more than 30 days past due on any mortgage debt or nonmortgage debt, excluding medical debt, during the 12 months immediately preceding the application date.
(e) The property owner is current on all mortgage debt on the subject property and has no more than one late payment during the six months immediately preceding the
application date and if the late payment did not exceed 30 days past due.
(f) The property that will be subject to the assessment contract is within the geographical boundaries of the applicable PACE program.
(g) The measures to be installed pursuant to the assessment contract are eligible under the terms of the applicable PACE program.
(h) The financing is for less than 15 percent of the value of the property, up to the first seven hundred thousand dollars ($700,000) inclusive of the existing assessments, and is for less than 10 percent of the remaining value of the property above seven hundred thousand dollars ($700,000).
(i) The total PACE assessments and the mortgage-related debt on the property subject to the PACE assessment will not exceed 97
percent of the market value of the property as established by the valuation required by Section 22685.
(j) The term of the assessment contract shall not exceed the estimated useful life of the measure to which the greatest portion of funds disbursed under the assessment contract is attributable. The program administrator shall determine useful life for purposes of this subdivision based upon credible third-party standards or certification criteria that have been established by appropriate government agencies or nationally recognized standards and testing organizations.
(k) The program administrator shall verify the existence of recorded PACE assessments and shall ask if the property owner has authorized additional PACE assessments on the same subject property that have not yet been recorded. The failure of a property owner to comply with this subdivision shall not invalidate an
assessment contract or any obligations thereunder, notwithstanding if the combined amount of the PACE assessments exceed the criteria set forth in subdivision (h) or (i). The existence of a prior PACE assessment or a prior assessment contract shall not constitute evidence that the assessment contract under consideration is affordable or meets any other program requirements.
(l) The assessment contract does not contain a penalty for early repayment of an amount owed under the contract.
(m) The property that will be subject to the assessment contract is not subject to a reverse mortgage, as defined in Section 1923 of the Civil Code.
(n) The program administrator shall use commercially reasonable and available methods to verify the above.
SEC. 2.
Section 5898.17 of the Streets and Highways Code, as amended by Section 10 of Chapter 837 of the Statutes of 2018, is amended to read:5898.17.
(a) The disclosure set forth below, or a substantially equivalent document that displays the same information in a substantially similar format, shall be completed and delivered to a property owner before the property owner consummates a voluntary contractual assessment described in this chapter for purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or a special tax described in Section 53328.1 of the Government Code. The disclosure shall be provided to the property owner as a printed paper copy in no smaller than 12-point type, unless the property owner opts out of receiving a printed paper copy in writing by signing a printed paper document. A property owner who opts out of receiving a printed paper copy of the disclosure shall be provided with an electronic copy in accordance with the Uniform Electronic Transactions Act (Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code). A sample of the disclosure set forth below shall be maintained on a public internet website available to property owners.(b) This section only applies to disclosure to a property owner who seeks to participate in a program established pursuant to this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4 for a residential property with four or fewer units.
Financing Estimate and Disclosure | ||
Notice to Property Owner: Existing law requires that
a printed paper copy of this document be provided to you before reviewing and signing, unless you opt out, in writing, to that printed copy by signing a printed paper document. If you opt out of receiving a printed paper copy of this disclosure, an electronic copy will be provided to you. The financing arrangement described below will result in an assessment against your property which will be collected along with your property taxes and will result in a lien on your property. You should read and review the terms carefully, and if necessary, consult with a tax professional or attorney. | ||
Customer Service Toll-Free telephone number and email: In the event you have a consumer complaint, questions about your financing obligations related to the contractual assessment or your contractual rights under the terms of this contract, you can contact either this
toll-free telephone number or email address provided below and receive a response within 24 hours or one business day. Toll-Free telephone number: ___________ Customer service email address: ___________ | ||
Products and Costs | ||
Product costs (including labor/installation) | $________ | |
Description 1. 2. 3. | ||
Financing
Costs | ||
Application fees and costs Prepaid Interest Other Costs Total Amount Financed | $________ $________ $________ $________ | |
Annual Percentage Rate (APR) Simple Interest Rate Total Annual Principal, Interest, and Administrative Fees | ______% ______% $______ | |
Note: If your property taxes are paid through an impound account, your mortgage lender may apportion the amount and add it to your monthly payment. | ||
See “Other Important
Considerations” below | ||
Total Amount you will have paid over the life of the financing | $________ | |
Other Costs Appraisal Fees Bond related costs Annual Administrative fees Estimated closing costs Credit Reporting Fees Recording Fees | $________ $________ $________ $________ $________ $________ | |
Total Financing Costs and Closing Costs | $________ | |
Estimated Cash (out of pocket) to close | $________ | |
Other Terms Prepayment fee | ◻ No | ◻ Yes ______ |
Additional Information About These Financing Comparisons[Use this information to compare to other financing options] | ||
Over the term of the financing | $________ Principal you will have paid off. $________ Amount of interest you have paid. $________ Amount of financing and other costs you will have paid. $________ Total you will have paid. | |
Annual Percentage Rate | ______% | |
Total Interest Paid (as a percentage of all the payments you have made) | ______% | |
Other Important Considerations | ||
I understand that I may be required to pay off the remaining balance of this obligation by the mortgage lender refinancing my home. If I sell my home, the buyer or their mortgage lender may require me to pay off the balance of this obligation as a condition of sale. | ||
_____
_______________
_____
[Borrower initials] | ||
Monthly Mortgage Payments | ||
Your payments will be added to your property tax bill. Whether you pay your property taxes through your mortgage payment, using an impound account, or if you pay them directly to the tax collector, you will need to save an estimated $_______ for your first tax installment. If you pay your taxes through an impound account you should notify your mortgage lender, so that your monthly mortgage payment can be adjusted by your mortgage lender to cover your increased property tax bill. | ||
_____
_______________
_____
[Borrower
initials] | ||
Tax Benefits: Consult your tax adviser regarding tax credits, credits and deductions, tax deductibility, and other tax benefits available. Making an appropriate application for the benefit is your responsibility. | ||
_____
_______________
_____
[Borrower initials] | ||
Statutory Penalties: If your property tax payment is late, the amount due will be subject to a 10% penalty, late fees, and 1.5% per month interest penalty as established by state law, and your property may be subject to foreclosure. | ||
_____
_______________
_____
[Borrower initials] | ||
Three Day Right to Cancel You, the property owner, may cancel the contract at any time on or before midnight on the third business day after the date of the transaction to enter into the agreement without any penalty or obligation. To cancel this transaction, you may mail or deliver a signed and dated copy of the contract with notice of cancellation to: ___________ [name of business] at ___________ [address] You may also cancel the contract by sending notification of cancellation by email to
the following email address: _________________[email address of business].
_____
_______________
_____
[Borrower initials] | ||
Confirmation of Receipt This confirms the receipt of the information in this form. You do not have to accept this financing just because you acknowledge that you have received or signed this form, and it is NOT a contract. | ||
__________________________ [Property Owner Signature - Date] | __________________________ [Property Owner Signature - Date] | |
(c) A public agency or other party to a voluntary contractual assessment described in this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or a special tax described in Section 53328.1 of the Government Code shall not make any monetary or percentage representations of increased value to a property owner regarding the effect the financed improvements will have on the market value of the property unless that public agency or other party derives its estimates of the market value using one of the following:
(1) An automated valuation model, which is a computerized property valuation system that is used to derive a real property value.
(2) A broker’s price opinion conducted by a real estate broker licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code.
(3) An appraisal conducted by a state licensed real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.
(d) For the purposes of this section, “property owner” shall include all owners of record.
(e) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.
SEC. 2.5.
Section 5898.17 of the Streets and Highways Code, as amended by Section 10 of Chapter 837 of the Statutes of 2018, is amended to read:5898.17.
(a) The disclosure set forth below, or a substantially equivalent document that displays the same information in a substantially similar format, shall be completed and delivered to a property owner before the property owner consummates a voluntary contractual assessment described in this chapter for purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or a special tax described in Section 53328.1 of the Government Code. The disclosure shall be provided to the property owner as a printed paper copy in no smaller than 12-point type, unless the property owner opts out of receiving a printed paper copy in writing by signing a printed paper document. A property owner who opts out of receiving a printed paper copy of the disclosure shall be provided with an electronic copy in accordance with the Uniform Electronic Transactions Act (Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code). A sample of the disclosure set forth below shall be maintained on a public internet website available to property owners.(b) (1) This section only applies to disclosure to a property owner who seeks to participate in a program established pursuant to this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4 for a residential property with four or fewer units.
Financing Estimate and Disclosure | ||
Notice to Property Owner:
Existing law requires that a printer paper copy of this document be provided to you before reviewing and signing, unless you opt out, in writing, to that printed copy by signing a printed paper document. If you opt out of receiving a printed paper copy of this disclosure, an electronic copy will be provided to you. The financing arrangement described below will result in an assessment against your property which will be collected along with your property taxes and will result in a lien on your property. You should read and review the terms carefully, and if necessary, consult with a tax professional or attorney. | ||
Customer Service Toll-Free telephone number and email: In the event you have a consumer complaint, questions about your financing obligations related to the contractual assessment or your contractual rights under the terms of this contract, you
can contact either this toll-free telephone number or email address provided below and receive a response within 24 hours or one business day. Toll-Free telephone number: ___________ Customer service email address: ___________ | ||
Products and Costs | ||
Product costs (including labor/installation) | $________ | |
Description 1. 2. 3. | ||
Financing Costs | ||
Application fees and costs Prepaid Interest Other Costs Total Amount Financed | $________ $________ $________ $________ | |
Annual Percentage Rate (APR) Simple Interest Rate Total Annual Principal, Interest, and Administrative Fees | ______% ______% $______ | |
Note: If your property taxes are paid through an impound account, your mortgage lender may apportion the amount and add it to your monthly payment. | ||
See “Other Important Considerations” below | ||
Total Amount you will have paid over the life of the financing | $________ | |
Other Costs Appraisal Fees Bond related costs Annual Administrative fees Estimated closing costs Credit Reporting Fees Recording Fees | $________ $________ $________ $________ $________ $________ | |
Total Financing Costs and Closing Costs | $________ | |
Estimated Cash (out of pocket) to close | $________ | |
Other Terms Prepayment fee | ◻ No | ◻ Yes ______ |
Additional Information About These Financing Comparisons[Use this information to compare to other financing options] | ||
Over the term of the financing | $________ Principal you will have paid off. $________ Amount of interest you have paid. $________ Amount of financing and other costs you will have paid. $________ Total you will have paid. | |
Annual Percentage Rate | ______% | |
Total Interest Paid (as a percentage of all the payments you have made) | ______% | |
Other Important Considerations | ||
I understand that I may be required to pay off the remaining balance of this obligation by the mortgage lender refinancing my home. If I sell my home, the buyer or their mortgage lender may require me to pay off the balance of this obligation as a condition of sale. | ||
_____
_______________
_____
[Borrower initials] | ||
Monthly Mortgage Payments | ||
Your payments will be added to your property tax bill. Whether you pay your property taxes through your mortgage payment, using an impound account, or if you pay them directly to the tax collector, you will need to save an estimated $_______ for your first tax installment. If you pay your taxes through an impound account you should notify your mortgage lender, so that your monthly mortgage payment can be adjusted by your mortgage lender to cover your increased property tax bill. | ||
_____
_______________
_____
[Borrower initials] | ||
Tax Benefits: Consult your tax adviser regarding tax credits, credits and deductions, tax deductibility, and other tax benefits available. Making an appropriate application for the benefit is your responsibility. | ||
_____
_______________
_____
[Borrower initials] | ||
Statutory Penalties: If your property tax payment is late, the amount due will be subject to a 10% penalty, late fees, and 1.5% per month interest penalty as established by state law, and your property may be subject to foreclosure. | ||
_____
_______________
_____
[Borrower initials] | ||
Three Day Right to Cancel You, the property owner, may cancel the contract at any time on or before midnight on the third business day after the date of the transaction to enter into the agreement without any penalty or obligation. To cancel this transaction, you may mail or deliver a signed and dated copy of the contract with notice of cancellation to: ___________ [name of business] at ___________ [address] You may also
cancel the contract by sending notification of cancellation by email to the following email address: _________________[email address of business].
_____
_______________
_____
[Borrower initials] | ||
Confirmation of Receipt This confirms the receipt of the information in this form. You do not have to accept this financing just because you acknowledge that you have received or signed this form, and it is NOT a contract. | ||
__________________________ [Property Owner Signature -
Date] | __________________________ [Property Owner Signature - Date] | |
(2) References to “three” and “third” in the document set forth in paragraph (1) shall be changed to “five” and “fifth,” respectively, for a property owner who is a senior citizen.
(3) The five-day right to cancel added by the act that added paragraph (2) to this subdivision shall apply to a contractual assessment entered into on or after January 1, 2021.
(c) A public agency or other party to a voluntary contractual assessment described in this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or a special tax described in Section 53328.1 of the
Government Code shall not make any monetary or percentage representations of increased value to a property owner regarding the effect the financed improvements will have on the market value of the property unless that public agency or other party derives its estimates of the market value using one of the following:
(1) An automated valuation model, which is a computerized property valuation system that is used to derive a real property value.
(2) A broker’s price opinion conducted by a real estate broker licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code.
(3) An appraisal conducted by a state licensed real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.
(d) For purposes of this section, “property owner” shall include all owners of record.
(e) For purposes of this section, “senior citizen” means an individual who is 65 years of age or older.
(f) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.
SEC. 3.
Section 5898.17 of the Streets and Highways Code, as added by Section 11 of Chapter 837 of the Statutes of 2018, is amended to read:5898.17.
(a) The disclosure set forth below, or a substantially equivalent document that displays the same information in a substantially similar format, shall be completed and delivered to a property owner before the property owner consummates a voluntary contractual assessment described in this chapter for purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code. The disclosure shall be provided to the property owner as a printed paper copy in no smaller than 12-point type, unless the property owner opts out of receiving a printed paper copy in writing by signing a printed paper document. A property owner who opts out of receiving a printed paper copy of the disclosure shall be provided with an electronic copy in accordance with the Uniform Electronic Transactions Act (Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code). A sample of the disclosure set forth below shall be maintained on a public internet website available to property owners.(b) This section only applies to disclosure to a property owner who seeks to participate in a program established pursuant to this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3 for a residential property with four or fewer units.
Financing Estimate and Disclosure | ||
Notice to Property Owner: Existing law requires that a printed paper
copy of this document be provided to you before reviewing and signing, unless you opt out, in writing, to that printed copy by signing a printed paper document. If you opt out of receiving a printed paper copy of this disclosure, an electronic copy will be provided to you. The financing arrangement described below will result in an assessment against your property which will be collected along with your property taxes and will result in a lien on your property. You should read and review the terms carefully, and if necessary, consult with a tax professional or attorney. | ||
Customer Service Toll-Free telephone number and email: In the event you have a consumer complaint, questions about your financing obligations related to the contractual assessment or your contractual rights under the terms of this contract, you can contact either this toll-free
telephone number or email address provided below and receive a response within 24 hours or one business day. Toll-Free telephone number: ___________ Customer service email address: ___________ | ||
Products and Costs | ||
Product costs (including labor/installation) | $________ | |
Description 1. 2. 3. | ||
Financing Costs | ||
Application fees and costs Prepaid Interest Other Costs Total Amount Financed | $________ $________ $________ $________ | |
Annual Percentage Rate (APR) Simple Interest Rate Total Annual Principal, Interest, and Administrative Fees | ______% ______% $______ | |
Note: If your property taxes are paid through an impound account, your mortgage lender may apportion the amount and add it to your monthly payment. | ||
See “Other Important Considerations” below | ||
Total Amount you will have paid over the life of the financing | $________ | |
Other Costs Appraisal Fees Bond related costs Annual Administrative fees Estimated closing costs Credit Reporting Fees Recording Fees | $________ $________ $________ $________ $________ $________ | |
Total Financing Costs and Closing Costs | $________ | |
Estimated Cash (out of pocket) to close | $________ | |
Other Terms Prepayment fee | ◻ No | ◻ Yes ______ |
Additional Information About These Financing Comparisons[Use this information to compare to other financing options] | ||
Over the term of the financing | $________ Principal you will have paid
off. $________ Amount of interest you have paid. $________ Amount of financing and other costs you will have paid. $________ Total you will have paid. | |
Annual Percentage Rate | ______% | |
Total Interest Paid (as a percentage of all the payments you have made) | ______% | |
Other Important Considerations | ||
I understand that I may be required to pay off the remaining balance of this obligation by the mortgage lender refinancing my home. If I sell my home, the buyer or their mortgage lender may require me to pay off the balance of this obligation as a condition of sale. | ||
_____
_______________
_____
[Borrower initials] | ||
Monthly Mortgage Payments | ||
Your payments will be added to your property tax bill. Whether you pay your property taxes through your mortgage payment, using an impound account, or if you pay them directly to the tax collector, you will need to save an estimated $_______ for your first tax installment. If you pay your taxes through an impound account you should notify your mortgage lender, so that your monthly mortgage payment can be adjusted by your mortgage lender to cover your increased property tax bill. | ||
_____
_______________
_____
[Borrower initials] | ||
Tax Benefits: Consult your tax adviser
regarding tax credits, credits and deductions, tax deductibility, and other tax benefits available. Making an appropriate application for the benefit is your responsibility. | ||
_____
_______________
_____
[Borrower initials] | ||
Statutory Penalties: If your property tax payment is late, the amount due will be subject to a 10% penalty, late fees, and 1.5% per month interest penalty as established by state law, and your property may be subject to foreclosure. | ||
_____
_______________
_____
[Borrower
initials] | ||
Three Day Right to Cancel You, the property owner, may cancel the contract at any time on or before midnight on the third business day after the date of the transaction to enter into the agreement without any penalty or obligation. To cancel this transaction, you may mail or deliver a signed and dated copy of the contract with notice of cancellation to: ___________ [name of business] at ___________ [address] You may also cancel the contract by sending notification of cancellation by email to the following email address: _________________[email address of business].
_____
_______________
_____
[Borrower initials] | ||
Confirmation of Receipt This confirms the receipt of the information in this form. You do not have to accept this financing just because you acknowledge that you have received or signed this form, and it is NOT a contract. | ||
__________________________ [Property Owner Signature - Date] | __________________________ [Property Owner Signature - Date] | |
(c) A public agency or other party to a voluntary contractual assessment described in this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code shall not make any monetary or percentage representations of increased value to a property owner regarding the effect the financed improvements will have on the market value of the property unless that public agency or other party derives its estimates of the market value using one of the following:
(1) An automated valuation model, which is a computerized property valuation system that is used to derive a real property value.
(2) A broker’s price opinion conducted by a real estate broker licensed pursuant to Part 1 (commencing with Section 10000) of
Division 4 of the Business and Professions Code.
(3) An appraisal conducted by a state licensed real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.
(d) For the purposes of this section, “property owner” shall include all owners of record.
(e) This section shall become operative on January 1, 2029.
SEC. 3.5.
Section 5898.17 of the Streets and Highways Code, as added by Section 11 of Chapter 837 of the Statutes of 2018, is amended to read:5898.17.
(a) The disclosure set forth below, or a substantially equivalent document that displays the same information in a substantially similar format, shall be completed and delivered to a property owner before the property owner consummates a voluntary contractual assessment described in this chapter for purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code. The disclosure shall be provided to the property owner as a printed paper copy in no smaller than 12-point type, unless the property owner opts out of receiving a printed paper copy in writing by signing a printed paper document. A property owner who opts out of receiving a printed paper copy of the disclosure shall be provided with an electronic copy in accordance with the Uniform Electronic Transactions Act (Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code). A sample of the disclosure set forth below shall be maintained on a public internet website available to property owners.(b) (1) This section only applies to disclosure to a property owner who seeks to participate in a program established pursuant to this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3 for a residential property with four or fewer units.
Financing Estimate and Disclosure | ||
Notice to Property Owner: Existing law
requires that a printed paper copy of this document be provided to you before reviewing and signing, unless you opt out, in writing, to that printed copy by signing a printed paper document. If you opt out of receiving a printed paper copy of this disclosure, an electronic copy will be provided to you. The financing arrangement described below will result in an assessment against your property which will be collected along with your property taxes and will result in a lien on your property. You should read and review the terms carefully, and if necessary, consult with a tax professional or attorney. | ||
Customer Service Toll-Free telephone number and email: In the event you have a consumer complaint, questions about your financing obligations related to the contractual assessment or your contractual rights under the terms of this contract, you can contact
either this toll-free telephone number or email address provided below and receive a response within 24 hours or one business day. Toll-Free telephone number: ___________ Customer service email address: ___________ | ||
Products and Costs | ||
Product costs (including labor/installation) | $________ | |
Description 1. 2. 3. | ||
Financing
Costs | ||
Application fees and costs Prepaid Interest Other Costs Total Amount Financed | $________ $________ $________ $________ | |
Annual Percentage Rate (APR) Simple Interest Rate Total Annual Principal, Interest, and Administrative Fees | ______% ______% $______ | |
Note: If your property taxes are paid through an impound account, your mortgage lender may apportion the amount and add it to your monthly payment. | ||
See “Other Important
Considerations” below | ||
Total Amount you will have paid over the life of the financing | $________ | |
Other Costs Appraisal Fees Bond related costs Annual Administrative fees Estimated closing costs Credit Reporting Fees Recording Fees | $________ $________ $________ $________ $________ $________ | |
Total Financing Costs and Closing Costs | $________ | |
Estimated Cash (out of pocket) to close | $________ | |
Other Terms Prepayment fee | ◻ No | ◻ Yes ______ |
Additional Information About These Financing Comparisons[Use this information to compare to other financing options] | ||
Over the term of the financing | $________ Principal you will have paid off. $________ Amount of interest you have paid. $________ Amount of financing and other costs you will have paid. $________ Total you will have paid. | |
Annual Percentage Rate | ______% | |
Total Interest Paid (as a percentage of all the payments you have made) | ______% | |
Other Important
Considerations | ||
I understand that I may be required to pay off the remaining balance of this obligation by the mortgage lender refinancing my home. If I sell my home, the buyer or their mortgage lender may require me to pay off the balance of this obligation as a condition of sale. | ||
_____
_______________
_____
[Borrower initials] | ||
Monthly Mortgage Payments | ||
Your payments will be added to your property tax bill. Whether you pay your property taxes through your mortgage payment, using an impound account, or if you pay them directly to the tax collector, you will need to save an estimated $_______ for your first tax installment. If you pay your taxes through an impound account you should notify your mortgage lender, so that your monthly mortgage payment can be adjusted by your mortgage lender to cover your increased property tax bill. | ||
_____
_______________
_____
[Borrower
initials] | ||
Tax Benefits: Consult your tax adviser regarding tax credits, credits and deductions, tax deductibility, and other tax benefits available. Making an appropriate application for the benefit is your responsibility. | ||
_____
_______________
_____
[Borrower initials] | ||
Statutory Penalties: If your property tax payment is late, the amount due will be subject to a 10% penalty, late fees, and 1.5% per month interest penalty as established by state law, and your property may be subject to foreclosure. | ||
_____
_______________
_____
[Borrower initials] | ||
Three Day Right to Cancel You, the property owner, may cancel the contract at any time on or before midnight on the third business day after the date of the transaction to enter into the agreement without any penalty or obligation. To cancel this transaction, you may mail or deliver a signed and dated copy of the contract with notice of cancellation to: ___________ [name of business] at ___________ [address] You may also cancel the contract by sending notification of cancellation by email to
the following email address: _________________[email address of business].
_____
_______________
_____
[Borrower initials] | ||
Confirmation of Receipt This confirms the receipt of the information in this form. You do not have to accept this financing just because you acknowledge that you have received or signed this form, and it is NOT a contract. | ||
__________________________ [Property Owner Signature - Date] | __________________________ [Property Owner Signature - Date] | |
(2) References to “three” and “third” in the document set forth in paragraph (1) shall be changed to “five” and “fifth,” respectively, for a property owner who is a senior citizen.
(3) The five-day right to cancel added by the act that added paragraph (2) to this subdivision shall apply to a contractual assessment entered into on or after January 1, 2021.
(c) A public agency or other party to a voluntary contractual assessment described in this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code shall not make any monetary or percentage representations of
increased value to a property owner regarding the effect the financed improvements will have on the market value of the property unless that public agency or other party derives its estimates of the market value using one of the following:
(1) An automated valuation model, which is a computerized property valuation system that is used to derive a real property value.
(2) A broker’s price opinion conducted by a real estate broker licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code.
(3) An appraisal conducted by a state licensed real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.
(d) For purposes of this section,
“property owner” shall include all owners of record.
(e) For purposes of this section, “senior citizen” means an individual who is 65 years of age or older.
(f) This section shall become operative on January 1, 2029.
SEC. 4.
Section 5913 of the Streets and Highways Code, as amended by Chapter 837 of the Statutes of 2018, is amended to read:5913.
(a) (1) Before a property owner executes an assessment contract the program administrator shall do the following:(A) Make an oral confirmation that at least one owner of the property has a copy of the contract assessment documents required by paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or Section 53328.1 of the Government Code, as applicable, with all the key terms completed, the financing estimate and disclosure form specified in Section 5898.17, and the right to cancel form specified in Section 5898.16, with hard copies available upon request.
(B) Make an oral confirmation of the key terms of the assessment contract, in plain language,
with the property owner on the call or to a verified authorized representative of the owner on the call and shall obtain acknowledgment from the property owner on the call to whom the oral confirmation is given.
(2) The oral confirmation required pursuant to paragraph (1) shall include, but is not limited to, all of the following information:
(A) The property owner on the call has the right to have other persons present for the call, and an inquiry as to whether the property owner would like to exercise the right to include anyone else on the call. This shall occur at the onset of the call, after the determination of the preferred language of communication.
(B) The property owner on the call is informed that they should review the assessment contract and financing estimate and disclosure form with all other owners of
the property.
(C) The efficiency improvement being installed is being financed by a PACE assessment.
(D) The total estimated annual costs the property owner will have to pay under the assessment contract, including applicable fees.
(E) The total estimated average monthly amount of funds the property owner would have to save in order to pay the annual costs under the PACE assessment, including applicable fees.
(F) That the county annual secured property tax bill, which will include the installment of the PACE lien, will be mailed by the county tax collector no later than November 1 each year, and that if the lien is recorded after the fiscal year closes but before the bill is mailed, the first installment may not appear on the county tax bill until the
following year.
(G) The term of the assessment contract.
(H) That payments on the assessment contract will be made through an additional annual assessment on the property and paid either directly to the county tax collector’s office as part of the total annual secured property tax bill, or through the property owner’s mortgage impound account, and that if the property owner pays taxes through an impound account, the property owner should notify the property owner’s mortgage lender to discuss adjusting the monthly mortgage payment by the estimated monthly cost of the PACE assessment.
(I) That the property will be subject to a lien during the term of the assessment contract and that the obligations under the assessment contract may be required to be paid in full before the property owner sells or refinances the
property.
(J) That the property owner has disclosed whether the property has received or is seeking additional PACE assessments and has disclosed all other PACE assessments or special taxes that are or about to be placed on the property, if known to and understood by the property owner.
(K) That any potential utility savings are not guaranteed, and will not reduce the assessment payments or total assessment amount.
(L) That the program administrator and contractor do not provide tax advice, and that the property owner should seek professional tax advice if the property owner has questions regarding tax credits, tax deductibility, or of other tax impacts on the PACE assessment or assessment contract.
(M) That if that property tax payment is delinquent
within the fiscal year, the county tax collector will assess a 10-percent penalty and may assess related costs, as required by state law. A delinquent payment also subjects the property to foreclosure. If the delinquent payment continues past June 30 of a given year and defaults, the county tax collector will assess penalties at the rate of 1 ½ percent per month (18 percent per year), and the property will continue to be subject to foreclosure and may become subject to the county tax collector’s right to sell the property at auction.
(N) That the property owner has a three-business day right to cancel the assessment contract pursuant to subdivision (b) of Section 5898.16, and that canceling the assessment contract may also cancel the home improvement contract under Section 5940.
(O) That it is the responsibility of the property owner to contact the property owner’s home insurance
provider to determine whether the efficiency improvement to be financed by the PACE assessment is covered by the property owner’s insurance plan.
(P) That the property owner may repay an amount owed pursuant to an assessment contract before the date that amount is due under the contract without early repayment penalty.
(b) The program administrator shall comply with the following when giving the oral confirmation described in subdivision (a):
(1) The program administrator shall record the oral confirmation in an audio format in accordance with applicable laws.
(2) The program administrator may not comply with the requirement in subdivision (a) through the use of a prerecorded message, or other similar device or method.
(3) Recording of an oral confirmation shall be retained by the program administrator for a period of at least five years from the time of the recording.
(c) The provisions of this section shall be in addition to the documents required to be provided to the property owner under Sections 5898.16 and 5898.17.
(d) At the commencement of the oral confirmation, the program administrator shall ask if the property owner on the call would prefer to communicate during the oral confirmation primarily in a language other than English that is specified in Section 1632 of the Civil Code. If the preferred language is supported by the program administrator, the oral confirmation shall be given in that primary language, except where the property owner on the call chooses to communicate through the property owner’s own interpreter. If
the preferred language is not supported and an interpreter is not chosen by the property owner on the call, the PACE assessment transaction shall not proceed. For purposes of this subdivision, “the property owner’s own interpreter” means a person, who is not a minor, is able to speak fluently and read with full understanding both the English language and any of the languages specified in Section 1632 of the Civil Code, and who is not employed by, and whose services are not made available through, the program administrator, the public agency, or the contractor.
(e) (1) Beginning on January 1, 2019, if the oral confirmation was conducted primarily in a language other than English that is specified in Section 1632 of the Civil Code, the program administrator shall deliver in writing the disclosures and contract or agreement required by law, including, but not limited to, the following:
(A) Assessment contract documents specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or a special tax described in Section 53328.1 of the Government Code.
(B) The financing estimate and disclosure form specified in Section 5898.17.
(C) The right to cancel form specified in Section 5898.16.
(2) Before the execution of any contract or agreement described in paragraph (1), the program administrator shall deliver a translation of the disclosures, contract, or agreement in the language in which the oral confirmation was conducted, that includes a translation of every term and condition in that contract or agreement.
(f) This section
shall remain in effect only until January 1, 2029, and as of that date is repealed.
SEC. 5.
Section 5913 of the Streets and Highways Code, as added by Chapter 837 of the Statutes of 2018, is amended to read:5913.
(a) (1) Before a property owner executes an assessment contract the program administrator shall do the following:(A) Make an oral confirmation that at least one owner of the property has a copy of the contract assessment documents required by paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or Section 53328.1 of the Government Code, as applicable, with all the key terms completed, the financing estimate and disclosure form specified in Section 5898.17, and the right to cancel form specified in Section 5898.16, with hard copies available upon request.
(B) Make an oral confirmation of the key terms of the assessment contract, in plain language, with the
property owner on the call or to a verified authorized representative of the owner on the call and shall obtain acknowledgment from the property owner on the call to whom the oral confirmation is given.
(2) The oral confirmation required pursuant to paragraph (1) shall include, but is not limited to, all the following information:
(A) The property owner on the call has the right to have other persons present for the call, and an inquiry as to whether the property owner would like to exercise the right to include anyone else on the call. This shall occur at the onset of the call, after the determination of the preferred language of communication.
(B) The property owner on the call is informed that they should review the assessment contract and financing estimate and disclosure form with all other owners of the
property.
(C) The efficiency improvement being installed is being financed by a PACE assessment.
(D) The total estimated annual costs the property owner will have to pay under the assessment contract, including applicable fees.
(E) The total estimated average monthly amount of funds the property owner would have to save in order to pay the annual costs under the PACE assessment, including applicable fees.
(F) That the county annual secured property tax bill, which will include the installment of the PACE lien, will be mailed by the county tax collector no later than November 1 each year, and that if the lien is recorded after the fiscal year closes but before the bill is mailed, the first installment may not appear on the county tax bill until the
following year.
(G) The term of the assessment contract.
(H) That payments on the assessment contract will be made through an additional annual assessment on the property and paid either directly to the county tax collector’s office as part of the total annual secured property tax bill, or through the property owner’s mortgage impound account, and that if the property owner pays taxes through an impound account, the property owner should notify the property owner’s mortgage lender to discuss adjusting the monthly mortgage payment by the estimated monthly cost of the PACE assessment.
(I) That the property will be subject to a lien during the term of the assessment contract and that the obligations under the assessment contract may be required to be paid in full before the property owner sells or refinances the
property.
(J) That the property owner has disclosed whether the property has received or is seeking additional PACE assessments and has disclosed all other PACE assessments or special taxes that are or are about to be placed on the property, if known to and understood by the property owner.
(K) That any potential utility savings are not guaranteed, and will not reduce the assessment payments or total assessment amount.
(L) That the program administrator and contractor do not provide tax advice, and that the property owner should seek professional tax advice if the property owner has questions regarding tax credits, tax deductibility, or of other tax impacts on the PACE assessment or assessment contract.
(M) That if that property tax payment is
delinquent within the fiscal year, the county tax collector will assess a 10-percent penalty and may assess related costs, as required by state law. A delinquent payment also subjects the property to foreclosure. If the delinquent payment continues past June 30 of a given year and defaults, the county tax collector will assess penalties at the rate of 1 ½ percent per month (18 percent per year), and the property will continue to be subject to foreclosure and may become subject to the county tax collector’s right to sell the property at auction.
(N) That the property owner has a three-business day right to cancel the assessment contract pursuant to subdivision (b) of Section 5898.16, and that canceling the assessment contract may also cancel the home improvement contract under Section 5940.
(O) That it is the responsibility of the property owner to contact the property owner’s home
insurance provider to determine whether the efficiency improvement to be financed by the PACE assessment is covered by the property owner’s insurance plan.
(P) That the property owner may repay an amount owed pursuant to an assessment contract prior to the date that amount is due under the contract without early repayment penalty.
(b) The program administrator shall comply with the following when giving the oral confirmation described in subdivision (a):
(1) The program administrator shall record the oral confirmation in an audio format in accordance with applicable laws.
(2) The program administrator may not comply with the requirement in subdivision (a) through the use of a prerecorded message, or other similar device or method.
(3) Recording of an oral confirmation shall be retained by the program administrator for a period of at least five years from the time of the recording.
(c) The provisions of this section shall be in addition to the documents required to be provided to the property owner under Sections 5898.16 and 5898.17.
(d) At the commencement of the oral confirmation, the program administrator shall ask if the property owner on the call would prefer to communicate during the oral confirmation primarily in a language other than English that is specified in Section 1632 of the Civil Code. If the preferred language is supported by the program administrator, the oral confirmation shall be given in that primary language, except where the property owner on the call chooses to communicate through the property owner’s own interpreter. If
the preferred language is not supported and an interpreter is not chosen by the property owner on the call, the PACE assessment transaction shall not proceed. For purposes of this subdivision, “the property owner’s own interpreter” means a person, who is not a minor, is able to speak fluently and read with full understanding both the English language and any of the languages specified in Section 1632 of the Civil Code, and who is not employed by, and whose services are not made available through, the program administrator, the public agency, or the contractor.
(e) (1) Beginning on January 1, 2019, if the oral confirmation was conducted primarily in a language other than English that is specified in Section 1632 of the Civil Code, the program administrator shall deliver in writing the disclosures and contract or agreement required by law, including, but not limited to, the following:
(A) Assessment contract documents specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code.
(B) The financing estimate and disclosure form specified in Section 5898.17.
(C) The right to cancel form specified in Section 5898.16.
(2) Before the execution of any contract or agreement described in paragraph (1), the program administrator shall deliver a translation of the disclosures, contract, or agreement in the language in which the oral confirmation was conducted, that includes a translation of every term and condition in that contract or agreement.
(f) This section shall become operative
on January 1, 2029.
SEC. 6.
(a) Section 2.5 of this bill incorporates amendments to Section 5898.17 of the Streets and Highways Code, as amended by Section 10 of Chapter 837 of the Statutes of 2018, proposed by both this bill and Assembly Bill 2471. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2021, (2) each bill amends Section 5898.17 of the Streets and Highways Code, and (3) this bill is enacted after Assembly Bill 2471, in which case Section 2 of this bill shall not become operative.(b) Section 3.5 of this bill incorporates amendments to Section 5898.17 of the Streets and Highways Code, as added by Section 11 of
Chapter 837 of the Statutes of 2018, proposed by both this bill and Assembly Bill 2471. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2021, (2) each bill amends Section 5898.17 of the Streets and Highways Code, and (3) this bill is enacted after Assembly Bill 2471, in which case Section 3 of this bill shall not become operative.
