Proposed Housing Laws for California |
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A Licensing Bill that seeks Monopoly Control of Association Homeowners |
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and John Campbell (R-70) e-mail are deceiving California Legislators Color PLEASE VOTE "NO" ON AB 555 |
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| BILL TEXT BILL NUMBER: AB 555 AMENDED BILL TEXT AMENDED IN ASSEMBLY APRIL 30, 2001 AMENDED IN ASSEMBLY APRIL 5, 2001 INTRODUCED BY Assembly Members Dutra and Correa FEBRUARY 21, 2001 An act to amend Sections 10153.2 and 10170.5 of, and to add Part 4 (commencing with Section 11500) to Division 4 of the Business and Professions Code, relating to common interest development managers. LEGISLATIVE COUNSEL'S DIGEST AB 555, as amended, Dutra. Common interest development managers. (1) Existing law, the Davis-Stirling Common Interest Development Act, establishes a scheme for the regulation of common interest developments. This bill would establish a program for the registration of managers of common interest developments. The bill would create the California Common Interest Development Manager Registration Council which would have specified duties and powers, including the charging of fees to applicants for registration as common interest development managers. (2) Existing law requires applicants for the real estate broker license examination and applicants for a real estate license renewal to meet certain education requirements. This bill would include in those requirements education in the subject of California law relating to managing community associations that own, operate, and maintain common interest developments. Because this bill would make it a misdemeanor for a person to violate the registration requirements and other provisions of the bill, it would impose a state-mandated local program. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares all of the following: (a) A large number of Californians find housing in the more than 33,000 common interest developments in this state. California common interest developments contain over three million homes, that house more than nine million people. (b) Homes in common interest developments are no different than homes that are not in that they most often represent the owner's single largest lifetime investment. (c) The ability of an owner living in a common interest development to maintain the value of his or her financial investment, and to enjoy his or her home is directly affected by the quality of the management provided by the community association to which the homeowner belongs, and which oversees the operation of the common interest development. (d) The management and operation of common interest developments is governed by a complex set of laws contained in the Civil, Corporations, Government, and Health and Safety Codes, and in federal statutes. In addition to possessing an understanding of this significant body of law, the successful professional common interest development management and the operations of a common interest development require fundamental skills in subjects including, but not limited to, finance accounting and bookkeeping, contract administration, human resources, and parliamentary procedure. (e) Common interest development managers are often delegated the authority, by the governing body of the common interest development, to collect and disburse hundreds of thousands, and sometimes millions of dollars annually in homeowner assessments, for the purpose of maintaining and operating the community. (f) Mismanagement of common interest developments has resulted in financial and personal harm to common interest developments, as well as legal liability for the owners of separate interests living in the common interest development. (g) The growth in common interest developments, coupled with the addition of governing statutes, has created a demand for individuals who possess the necessary skills and technical expertise to act as common interest development managers. (h) Currently, there are no statutory mandatory educational or skill standards that individuals who may be hired for compensation to manage a common interest development are required to meet. This lack of required qualifications has resulted in problems in the area of common interest development management. In essence, any person can be a common interest development manager without related education. (i) To protect the over nine million Californians who reside in common interest developments in this state, common interest development managers should be required to possess certain minimal skills if they offer their services for compensation to California common interest developments, and to provide this information to the public who could be most harmed. SEC. 2. Section 10153.2 of the Business and Professions Code is amended to read: 10153.2. (a) An applicant to take the examination for an original real estate broker license shall also submit evidence, satisfactory to the commissioner, of successful completion, at an accredited institution, of: (1) A three-semester unit course, or the quarter equivalent thereof, in each of the following: (A) Real estate practice. (B) Legal aspects of real estate. (C) Real estate appraisal. (D) Real estate financing. (E) Real estate economics or accounting. (2) A three-semester unit course, or the quarter equivalent thereof, in any of the following: (A) Advanced legal aspects of real estate. (B) Advanced real estate finance. (C) Advanced real estate appraisal. (D) Business law. (E) Escrows. (F) Real estate principles. (G) Property management. (H) Real estate office administration. (I) Mortgage loan brokering and lending. (J) California law that relates to managing community associations that own, operate and maintain common interest developments, including, but not limited to, topics covered by the Davis-Stirling Common Interest Development Act. (3) On and after January 1, 1986, an applicant shall submit evidence of successful completion of each of the courses listed in paragraph (1) and any three of the courses listed in paragraph (2). (b) The commissioner shall waive the requirements of this section for an applicant who is a member of the State Bar of California and shall waive the requirements for which an applicant has successfully completed an equivalent course of study as determined under Section 10153.5. (c) The commissioner shall extend credit under this section for any course completed to satisfy requirements of Section 10153.3 or 10153.4. SEC. 3. Section 10170.5 of the Business and Professions Code is amended to read: 10170.5. (a) Except as otherwise provided in Sections 10153.4 and 10170.8, no real estate license shall be renewed unless the commissioner finds that the applicant for license renewal has, during the four-year period preceding the renewal application, successfully completed the 45 clock hours of education provided for in Section 10170.4, including all of the following: (1) A three-hour course in ethics, professional conduct, and legal aspects of real estate, which shall include, but not be limited to, relevant legislation, regulations, articles, reports, studies, court decisions, treatises, and information of current interest. (2) A three-hour course in agency relationships and duties in a real estate brokerage practice, including instruction in the disclosures to be made and the confidences to be kept in the various agency relationships between licensees and the parties to real estate transactions. (3) A three-hour course in trust fund accounting and handling. (4) A three-hour course in fair housing. (5) Not less than 18 clock hours of courses or programs related to consumer protection, and designated by the commissioner as satisfying this purpose in his or her approval of the offering of these courses or programs, which shall include, but not be limited to, forms of real estate financing relevant to serving consumers in the marketplace; land use regulation and control; pertinent consumer disclosures; agency relationships; capital formation for real estate development; fair practices in real estate; appraisal and valuation techniques; landlord-tenant relationships; energy conservation; environmental regulation and consideration; taxation as it relates to consumer decisions in real estate transactions; probate and similar disposition of real property; governmental programs such as revenue bond activities, redevelopment, and related programs; business opportunities; and mineral, oil, and gas conveyancing; and California law that relates to managing community associations that own, operate and maintain common interest developments, including, but not limited to, topics covered by the Davis-Stirling Common Interest Development Act. (6) Other courses and programs that will enable a licensee to achieve a high level of competence in serving the objectives of consumers who may engage the services of licensees to secure the transfer, financing, or similar objectives with respect to real property, including organizational and management techniques that will significantly contribute to this goal. (b) Except as otherwise provided in Section 10170.8, no real estate license shall be renewed for a licensee who already has renewed under subdivision (a), unless the commissioner finds that the applicant for license renewal has, during the four-year period preceding the renewal application, successfully completed the 45 clock hours of education provided for in Section 10170.4, including a six-hour update survey course that covers the subject areas specified in paragraphs (1) to (4), inclusive, of subdivision (a). (c) Any denial of a license pursuant to this section shall be subject to Section 10100. SEC. 4. Part 4 (commencing with Section 11500) is added to Division 4 of the Business and Professions Code, to read: PART 4. THE COMMON INTEREST DEVELOPMENT MANAGER REGISTRATION ACT CHAPTER 1. PURPOSE AND DEFINITIONS 11500. This part shall be known and may be cited as the Common Interest Development Manager Registration Act. 11501. The primary purpose of this part is to (a) recognize consistent minimum standards of education, competence, and fair and ethical behavior for individuals who are hired for compensation as managers of common interest developments, including community apartment projects, planned developments, condominium projects, and stock cooperatives, as set forth in the Davis-Stirling Common Interest Development Act, Sections 1350 to 1376, inclusive, of the Civil Code; (b) promote statewide awareness of, and compliance with the laws governing common interest developments; (c) help ensure long-term viability of a major segment of the state's housing stock and its supporting infrastructure; and (d) protect the financial and personal investments of homeowners in common interest developments. 11502. The following definitions apply only to the provisions of this part. (a) "Approved provider" means an organization qualified by the council to provide educational courses to common interest development managers. (b) "Common interest development" means a residential development, as defined in Section 1351 of the Civil Code. (c) "Community association" means an incorporated or unincorporated association established to manage a common interest development in which membership is a condition of ownership, and which is authorized to impose assessments and fees upon the members of the association, and where the governing body is authorized to hire for compensation a common interest development manager. (d) "Council" means the California Common Interest Development Manager Registration Council, established pursuant to Section 11507. (e) "Financial services" means an act performed or offered for a community association, including, but not limited to, the preparation of internal unaudited financial statements, internal accounting and bookkeeping functions, billing of assessments and related services. (f) "Management services" means an act performed or offered to be performed in an advisory capacity, for compensation, for a community association including, but not limited to, the following: (1) Administering or supervising the financial or common area assets of a community association or common interest development. (2) Implementing resolutions and directives of the board of directors of the community association elected to oversee the operation of a common interest development. (3) Implementing provisions of governing documents, as defined in Section 1351 of the Civil Code, which govern the operation of the community association or common interest development. (4) Administering a community association's contracts, including insurance contracts, within the scope of the community association's duties or with other common interest development managers, vendors, and other third-party providers of goods and services to a community association or common interest development. (g) "Provisional registrant" means an individual who has applied for and received a temporary registration issued pending completion of all requirements for registration and who is working under the supervision of a registrant, except as provided for in subdivision (d) of Section 11517. (h) "Registrant" means an individual who, having satisfied the requirements of this part, is registered as a common interest development manager by the council. 11503. (a) "Common interest development manager" means an individual who, in an advisory capacity, for compensation or in expectation of compensation, whether acting as an agent, an independent contractor, employee of an agent or independent contractor, or an employee of a community association, provides management or financial services, negotiates an agreement to provide management or financial services, or represents himself or herself to act in the capacity of providing management or financial services. (b) "Common interest development manager" also means any of the following: (1) An individual who may be a partner in a partnership in the capacity to advise and direct the activity of a registrant, or who acts as a principal on behalf of a company that provides management or financial services. (2) An individual operating under a fictitious business name who provides management or financial services. (3) An individual who agrees to provide management or financial services. (4) A supervisor of an individual who provides management or financial services. 11504. It is unlawful for any individual to act as a common interest development manager in this state without first obtaining a registration or a provisional registration issued by the council. Nothing in this part shall be construed to require a community association to hire for compensation a common interest development manager, unless required to do so by the governing documents of the common interest development. This section shall be operative on July 1, 2003. 11505. The following persons and organizations may engage in the specified acts without being registered as a common interest development manager: (a) An attorney at law or a law firm rendering legal services. (b) A licensed accountant providing tax or accounting services other than those described in Section 11503. (c) A regulated financial institution providing services within the scope of its authority under applicable federal and state law. (d) A receiver, trustee in bankruptcy, or other person acting as an officer of a court of competent jurisdiction. (e) A maintenance or repair person, security guard, janitor, housekeeper, receptionist, telephone operator, accounting or data entry clerk, staff person for a recreational or community relations program, administrative or clerical support personnel, customer service personnel, a construction manager performing work as a construction manager, and similar positions, who carry out duties other than those duties described in Section 11503. (f) A person who is a licensed real estate broker, as defined in Article 1 (commencing with Section 10130) of Chapter 3 of Division 4, who has completed the coursework specified in subparagraph (J) of paragraph (2) of subdivision (a) of Section 10153.2 in application for his or her license, or who has completed the coursework specified in paragraph (5) of subdivision (a) of Section 10170.5 specifically pertaining to the provision of management services to common interest developments or a community association as defined under the Davis-Stirling Common Interest Development Act. 11506. A partnership, corporation, or other business entity may perform acts for which registration is required if each person performing the tasks on behalf of the business entity is a registrant under this part, or is exempt as provided in Section 11505. CHAPTER 2. THE CALIFORNIA COMMON INTEREST DEVELOPMENT MANAGER REGISTRATION COUNCIL 11507. The California Common Interest Development Manager Registration Council is hereby created. 11508. The primary purpose of the council is to register any and all individuals that meet the educational and other required qualifications for becoming a common interest development manager as set forth in this part. 11509. (a) The council's initial governing body shall consist of seven individuals. Six of the initial council members shall be individuals who are currently practicing as common interest development managers as defined in Section 11503. Each of the six members shall have a minimum of 10 years experience managing common interest developments in California and shall represent a society, association, or other organization operating as a California nonprofit corporation that chooses to participate in the council and that represents individuals who, for compensation, work as common interest development managers as defined in Section 11503. The seventh initial council member shall be an attorney with a minimum of 10 years general counsel experience representing community association in California. (b) The initial members of the council shall act as the council organizing committee and shall be responsible for ensuring that other organizations wishing to participate in and having representation on the council meet the criteria set forth in this section, and any other council guidelines for membership and participation as determined by the organizing committee. (c) The initial members of the council shall serve for a term of three years after the effective date of this part. This term shall begin 60 days after the effective date of this part. Thereafter, the bylaws of the council shall specify an election of qualified members to the council by registrants as set forth in subdivision (b) of Section 11510. (d) The council shall appoint one council manager member as the first presiding officer of the council. That member shall serve in the capacity as presiding officer for the first two years of the council's existence. Thereafter, the presiding officer shall be elected annually by a majority of the council membership. 11510. (a) The council shall incorporate as a nonprofit California Corporation. The council shall adopt a set of bylaws governing its operations and membership. The bylaws shall be adopted with a majority vote of the council's membership. (b) The council shall establish an election process to elect all subsequent members of the council by registrants. Each member duly elected to the council in accordance with the bylaws, except for the attorney member specified in Section 11507, shall be a registrant currently practicing as a common interest development manager. The bylaws shall establish that each manager member of the council other than the initial manager members shall have no less than five years of experience managing common interest developments in California. The attorney member of the council shall be an attorney with a minimum of 10 years experience representing community associations in California. The members of the council shall serve for a term of three years. The council may appoint a qualified registrant to fulfill the term of a member of the council upon the member's resignation, death, or other circumstances that prevent the completion of a term. (c) Upon enactment of mandatory registration as specified in Section 11504, the bylaws shall be amended only by a vote or written consent of a majority of a quorum of not less than 25 percent of registrants as of the record date specified in the bylaws. The council shall establish reasonable procedures and requirements for initiation of proposed bylaw amendment either by the council or by the registrants. 11511. The council's duties include, but are not limited to, the following: (a) Creating qualifications for and developing an official roster of approved providers that offer educational courses and programs consistent with the educational requirements for common interest development managers as set forth in Section 11512. Approved providers may be listed by type or by the title of the specific organization. The council shall approve providers who satisfactorily offer the necessary education and courses required by this part for common interest development manager registration. The council shall publish a roster of approved providers. The council shall periodically review requests for approving providers, and update its roster, but not less than once every six months. The council may charge a fee for the processing of an application to become a provider. (b) The council shall develop an official application form specifying the information an individual shall submit for the purpose of becoming a registrant or provisional registrant. The council may charge a fee for the processing of an application form. (c) The council shall receive completed applications for common interest development manager registration, and shall review the credentials of the individual applicants to determine if they meet the educational requirements set forth in Section 11512. The council may accept an alternative certification as described in Section 11513 as a substitute for all or part of an applicant's required education. (d) Upon determining that an individual applicant has satisfied the educational and other requirements pursuant to this part to become a registrant and, has paid any required fees, the council shall issue a registration to that individual. Each registration shall contain a unique registration number. The council shall register that individual in an index of registered common interest development managers along with that individual's unique registration number. The index shall be made available to any person or entity in this state that requests a copy, as well as any law enforcement or government agency which requests a copy. (e) The council may charge a fee to applicants to cover the costs of its duties. Fees shall not exceed the council's actual cost of doing business, as calculated on an annual basis. Application fees for the first year of the council's existence shall be based on an estimated cost basis. If at the conclusion of the first year fees exceeded costs the council may choose to refund any excess to applicants who have been registered, or apply any excess fees to applicants' registration renewals. (f) The council shall set forth requirements for periodic registration renewal. Renewals shall not be required more than once every three years. Renewals shall, at a minimum, require every registered common interest development manager to have received continuing education as specified in Section 11516. The council may charge a fee for renewals. (g) The council may hire staff to carry out clerical and administrative duties as necessary. CHAPTER 3. COMMON INTEREST DEVELOPMENT MANAGER REGISTRATION REQUIREMENTS 11512. In order to register as a common interest development manager, the applicant shall remit any required application fee and the council shall find that an applicant satisfactorily demonstrates on his or her application that he or she meets the following minimum qualifications: (a) The applicant is at least 18 years of age. (b) The applicant has graduated high school or an equivalent. (c) The applicant has successfully completed the following educational requirements: (1) Sixteen hours of instruction in California law that is related to the management of common interest developments, including, but not limited to, the following courses of study: (A) The topics covered by the Davis-Stirling Common Interest Development Act, Sections 1350 to 1376, inclusive, of the Civil Code, including, but not limited to, types of California common interest developments, disclosure requirements pertaining to common interest developments, meeting requirements for community association boards of directors and members, financial disclosure and reporting requirements, and access to community association records. (B) Personnel issues, including, but not limited to, general matters related to independent contractor or employee status, issues related to types of harassment, the Unruh Civil Rights Act, fair employment laws, and the Americans with Disabilities Act. (C) Risk management as it pertains to common interest developments, including but not limited to required insurance coverage and preventative maintenance programs. (D) Property protection, including, but not limited to, general matters relating to hazardous materials such as asbestos, radon and lead, the Vehicle Code, local and municipal regulations, family day care homes, energy conservation, Federal Communications Commission rules and regulations, and solar energy systems. (E) The business affairs of community associations, including, but not limited to, necessary compliance with all required local, state and federal laws and treatises. (F) Basic understanding of governing documents, codes, and regulations relating to the activities and affairs of community associations and common interest developments. (2) Fourteen hours of instruction in general management that is related to the managerial and business skills needed for management of a common interest development, including, but not limited to, the following: (A) Finance courses, including but not limited to budget preparation, management and administration of community association financial affairs, bankruptcy laws, and assessment collection activities. (B) Contract negotiation and administration. (C) Supervision of common interest development employees and staff. (D) Management of common interest development maintenance programs. (E) Management and administration of rules, regulations, parliamentary procedures, and architectural standards pertaining to community associations and common interest developments. (F) Management and administration of common interest development recreational programs and facilities. (G) Management and administration of owner and resident communications. (H) Training and strategic planning for the community association' s board of directors and committees, and other activities of residents in a California common interest development. (I) Risk management as it pertains to common interest development properties, activities and emergency preparedness. (J) Implementation of community association policies and procedures. (K) Ethics for California common interest development managers. (L) Professional conduct and standards of practice for California common interest development managers. (M) Current issues relating to California common interest developments. 11513. The council may accept certifications that the applicant has previously received as an alternative to the educational requirements set forth in Section 11512. These certifications shall include, but not necessarily be limited to, the certified community association manager (CCAM) designation given to an individual who has met the educational, experience and ethical qualifications established by the California Association of Community Managers, a statewide professional association, and the professional community association manager (PCAM) designation given to an individual who has met the educational, experience, and ethical qualifications established by the Community Associations Institute. Applicants shall be required to demonstrate that an alternative certification satisfies all or part of the educational requirements set forth in Section 11512, and shall submit any required application fee to the council. A person who is a licensed real estate broker, as defined in Article 1 (commencing with Section 10130) of Chapter 3 of Division 4, and who has completed the course work specified in subparagraph (A) of paragraph (1) of subdivision (a) of Section 10153.2 in application for his or her license, or who has completed the course work specified in paragraph (5) of subdivision (a) of Section 10170.5 specifically pertaining to the provision of management services to common interest developments or a community association as defined under the Davis-Stirling Common Interest Development Act, shall be allowed to register as a common interest development manager pursuant to this part upon payment of the applicable registration fee and submittal of evidence as to the completion of course work specified herein. All registrations issued by the council pursuant to this part shall be valid for three years from the date of the applicant's registration. At the end of the three-year period, the registration shall expire, unless renewed as set forth in Section 11515. 11515. (a) A registrant shall apply to the council for the renewal of his or her registration no sooner than 90 days prior to the expiration of the registration. Proof of compliance with the continuing education requirements set forth in this section shall accompany the application for renewal. (b) A registration shall be renewed only if the registrant submits proof of successful completion of 15 hours of continuing education by an approved provider, including all of the following: (1) A minimum of seven hours of instruction in California law by an approved provider pertaining to common interest developments, including but not limited to relevant legislation, regulations, articles, reports, studies, court decisions and treatises. (2) Eight hours of instruction in other courses and programs by an approved provider to enable a registrant to achieve a high level of competence in serving the objectives of community associations that may engage the services of a registrant to manage their common interest development, including organizational and management techniques. 11516. (a) The council may issue a provisional registration to an individual actively engaged in completing the requirements for registration who has not yet achieved the education necessary for registration, provided that the individual (1) complies with all of the other application requirements set forth in Section 11512 and (2) works under the supervision of a registrant until all other requirements have been satisfied. (b) An individual who has applied for provisional registration may lawfully provide services to a community association once an application has been filed with the council and the applicant is working under the supervision of a registrant. (c) The supervising registrant shall submit to the council a statement certifying that he or she agrees to supervise the provisional registrant's activities. (d) A provisional registration shall automatically expire after one year and shall not be renewed except that, on a showing of good cause, the council may allow up to an additional 90 days after the one-year period to satisfy the requirements for a registrant. An individual may apply for registration prior to the expiration of his or her provisional registration if he or she has satisfied all of the requirements set forth in Section 11512. (e) The council may waive the requirement set forth in subdivision (b) if the council determines that a registrant is not available to supervise a provisional registrant as required in subdivision (b). If the council waives the requirement it may set forth an alternative as deemed necessary. 11517. On an annual basis any registrant or provisional registrant who either provides or contemplates providing management services or financial services to a community association shall disclose to the board of directors of the community association the following information: (a) A copy of his or her registration or provisional registration number. (b) Proof that he or she has met the requirements for fidelity insurance, as required by Section 11520. (c) The location of his or her primary office. CHAPTER 4. REVOCATION OF REGISTRATION 11518. The council shall revoke a registration or provisional registration issued to a common interest development manager upon the order of a court following a plea of nolo contendre to or conviction of a felony, a crime of moral turpitude, or a violation of this part pursuant to Section 11519 by the registrant or provisional registrant. 11519. (a) The superior court in and for the county in which an individual acts as a common interest development manager in violation of this part, may, upon petition by any person, organization, or other entity issue an injunction or other appropriate order restraining the conduct. The proceedings under this paragraph shall be governed by Chapter 3 (commencing with Section 525) of Title 7, of Part 2 of the Code of Civil Procedure. (b) A person who violates a provision of this part is guilty of a misdemeanor, which offense is punishable by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in a county jail for not more than one year, or by both. (c) If a party is found liable in any action filed pursuant to this section, the party shall be required to pay all attorney's fees and court costs. CHAPTER 5. FIDELITY INSURANCE OF COMMON INTEREST DEVELOPMENT MANAGERS 11520. (a) Each individual who acts as a common interest development manager shall show evidence of fidelity insurance at all times while being compensated as a manager of a common interest development in an amount sufficient to protect the funds of the community association. (b) The fidelity insurance required by this section shall be for the benefit of any person or persons damaged by any violation of this part by fraud, dishonesty, or the disappearance of funds. (c) The fidelity insurance required by this section may be provided by the fidelity insurance policy of the community association by a fidelity insurance policy that covers the funds of the community association. SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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P. O. Box 97 San Juan Capistrano, California 92693 Phone: (949) 366-2125 Email: ahrc@ahrc.com Homeowner association databank : http://www.homeownerassociations.org |
