BILL NUMBER: SB 137 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Ducheny, Dunn, and Figueroa
(Coauthor: Assembly Member Jones)
FEBRUARY 2, 2005
An act to amend Sections 1365.1 and 1367.1 of, to add Sections
1367.4 and 1367.5 to, and to repeal Section 1366.3 of, the Civil
Code, and to amend Section 116.540 of, and to add Section 729.035 to,
the Code of Civil Procedure, relating to common interest
developments.
LEGISLATIVE COUNSEL'S DIGEST
SB 137, as introduced, Ducheny. Common interest developments:
assessments.
Existing law defines and regulates common interest developments
and authorizes the association that manages the development to levy
assessments to fulfill its obligations. Existing law provides that a
regular or special assessment of the association, late charges,
reasonable costs of collection, attorney's fees, and interest, as
specified, are a debt of the owner of the separate interest at the
time the assessment or other sums are levied, and are a lien on the
owner's separate interest when the association records a specified
document and follows a specified process. Existing law permits the
association to enforce the lien in any manner permitted by law
including a sale by a trustee, also known as nonjudicial foreclosure.
Existing law authorizes an owner of a separate interest in a
common interest development to pay assessments that are in dispute in
full under protest. Existing law, the right of redemption, permits a
judgment debtor, as defined, to redeem his or her real property, as
specified, after judicial foreclosure only if the decree of
foreclosure finds that a deficiency judgment may be ordered against
the debtor.
This bill would revise and recast the procedures for collecting
delinquent assessments for certain debts that arise on and after
January 1, 2006. The bill would provide that when an association of a
common interest development seeks to collect delinquent assessments
of less than $2,500, not including specified late charges and fees,
the association must either file a civil action in small claims court
or record a lien upon which it would be prohibited from foreclosing
until the amount equals or exceeds $2,500. The bill would repeal
provisions authorizing the owner of a separate interest to pay
assessments that are in dispute in full under protest and requiring
the board of directors of an association to respond to an owner's
written dispute of a debt within 15 days.
The bill would permit an association of a common interest
development seeking to collect delinquent regular or special
assessments of $2,500 or more, not including specified late charges
and fees, to use foreclosure subject to specified conditions. Among
these conditions, the bill would require the board of directors of an
association to make the decision to record a lien against a separate
interest or to foreclose upon a lien at an executive meeting of the
board, by a majority vote, and to record the results of the vote, as
specified, and would require the board to provide notice of the
decision to foreclose, as specified.
The bill would require, if the owner so requests, that the
association permit the owner of the separate interest to elect
dispute resolution or alternative dispute resolution procedures,
under specified circumstances. The association would be prohibited
from recording a lien or initiating a foreclosure action without
participating in those procedures if so requested by the owner. If it
is determined through dispute resolution or alternative dispute
resolution that an association has filed a lien for a delinquent
assessment in error, the association would be required to reverse
specified charges and take other corrective actions.
The bill would further provide that, notwithstanding any law to
the contrary, a foreclosure by an association to collect upon a debt
for a delinquent assessment, as specified, is subject to a right of
redemption. The bill would provide a redemption period of 90 days.
The bill would establish a minimum bid of 65% of the appraised value,
exclusive of senior liens, as specified, in a judicial or
nonjudicial foreclosure to collect upon a debt for a delinquent
assessment, as specified. The bill would exempt from its provisions
developers and separate interest owners in timeshare projects, as
specified.
The bill would also authorize an association created to manage a
common interest development to appear and participate in small claims
court hearings through a management company representative or
bookkeeper who appears on behalf of the association.
The bill would make other related, conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1365.1 of the Civil Code is amended to read:
1365.1. (a) The association shall distribute the written notice
described in subdivision (b) to each member of the association during
the 60-day period immediately preceding the beginning of the
association's fiscal year. The notice shall be printed in at least
12-point type. An association distributing the notice to an owner of
an interest that is described in Section 11212 of the Business and
Professions Code that is not otherwise exempt from this section
pursuant to subdivision (a) of Section 11211.7, may delete from the
notice described in subdivision (b) the portion regarding meetings
and payment plans.(b) The notice required by this section shall read
as follows:
"NOTICE ASSESSMENTS AND FORECLOSURE"
This notice outlines some of the rights and responsibilities of
owners of property in common interest developments and the
associations that manage them. Please refer to the sections of the
Civil Code indicated for further information. A portion of the
information in this notice applies only to liens recorded on or after
January 1, 2003. You may wish to consult a lawyer if you dispute an
assessment.
ASSESSMENTS AND NONJUDICIAL FORECLOSURE
Assessments become delinquent 15 days after they are due,
unless the governing documents provide for a longer time. The
failure to pay association assessments may result in the loss of an
owner's property through foreclosure. Foreclosure may occur
either as a result of a court action, known as judicial foreclosure
or without court action, often referred to as nonjudicial
foreclosure. For liens perfected on and after January 1, 2006,
an association may not use judicial or nonjudicial foreclosure to
enforce that lien if the amount of the delinquent assessments or
dues, exclusive of any late charges, fees, attorney's fees, interest,
and costs of collection, is less than two thousand five hundred
dollars ($2,500). For delinquent assessments or dues in excess of two
thousand five hundred dollars ($2,500), an association may use
judicial or nonjudicial foreclosure subject to the conditions set
forth in Section 1367.4 of the Civil Code. When using
judicial or nonjudicial foreclosure, the association records a
lien on the owner's property. The owner's property may be sold to
satisfy the lien if the amounts secured by the lien
is are not paid. Assessments
become delinquent 15 days after they are due, unless the governing
documents of the association provide for a longer time.
(Sections 1366 and , 1367.1 , and
1367.4 of the Civil Code)
In a judicial or nonjudicial foreclosure, the
association may recover assessments, reasonable costs of collection,
reasonable attorney's fees, late charges, and interest. The
association may not use nonjudicial foreclosure to collect fines or
penalties, except for costs to repair common areas damaged by a
member or a member's guests, if the governing documents provide for
this. (Sections 1366 and 1367.1 of the Civil Code)
The association must comply with the requirements of Section
1367.1 of the Civil Code when collecting delinquent assessments. If
the association fails to follow these requirements, it may not record
a lien on the owner's property until it has satisfied those
requirements. Any additional costs that result from satisfying the
requirements are the responsibility of the association. (Section
1367.1 of the Civil Code)
At least 30 days prior to recording a lien on an owner's separate
interest, the association must provide the owner of record with
certain documents by certified mail . Among these documents,
the association must send , including a
description of its collection and lien enforcement procedures and the
method of calculating the amount. It must also provide an itemized
statement of the charges owed by the owner. An owner has a right to
review the association's records to verify the debt. (Section 1367.1
of the Civil Code)
If a lien is recorded against an owner's property in error, the
person who recorded the lien is required to record a lien release
within 21 days, and to provide an owner certain documents in this
regard. (Section 1367.1 of the Civil Code)
The collection practices of the association may be governed by
state and federal laws regarding fair debt collection. Penalties can
be imposed for debt collection practices that violate these laws.
PAYMENTS
When an owner makes a payment, he or she may request a receipt,
and the association is required to provide it. On the receipt, the
association must indicate the date of payment and the person who
received it. The association must inform owners of a mailing address
for overnight payments. ( Section 1367.1 of the Civil Code)
An owner may dispute an assessment debt by giving the
board of the association a written explanation, and the board must
respond within 15 days if certain conditions are met. An owner may
pay assessments that are in dispute in full under protest, and then
request alternative dispute resolution. (Sections 1366.3 and 1367.1
of the Civil Code) submitting a written request for
dispute resolution to the association as set forth in
Article 5 (commencing with Section 1368.810) of Chapter 4 of Title 6
of Division 2 of the Civil Code. In addition, an association may not
initiate a foreclosure without participating in alternative dispute
resolution with a neutral third party as set forth in Article 2
(commencing with Section 1369.510) of Chapter 7
of Title 6 of Division 2 of the Civil Code, if so requested by the
ow ner .
An owner is not liable for charges, interest, and costs of
collection, if it is established that the assessment was paid
properly on time. (Section 1367.1 of the Civil Code)
MEETINGS AND PAYMENT PLANS
An owner of a separate interest that is not a time-share
timeshare may request the association to
consider a payment plan to satisfy a delinquent assessment. The
association must inform owners of the standards for payment plans, if
any exist. (Section 1367.1 of the Civil Code)
The board of directors must meet with an owner who makes a proper
written request for a meeting to discuss a payment plan when the
owner has received a notice of a delinquent assessment. These payment
plans must conform with the payment plan standards of the
association, if they exist. (Section 1367.1 of the Civil Code)"
SEC. 2. Section 1366.3 of the Civil Code is repealed.
1366.3. (a) The exception for disputes related to association
assessments in subdivision (b) of Section 1354 shall not apply if, in
a dispute between the owner of a separate interest and the
association regarding the assessments imposed by the association, the
owner of the separate interest chooses to pay in full to the
association all of the charges listed in paragraphs (1) to (4),
inclusive, and states by written notice that the amount is paid under
protest, and the written notice is mailed by certified mail not more
than 30 days from the recording of a notice of delinquent assessment
in accordance with Section 1367 or 1367.1; and in those instances,
the association shall inform the owner that the owner may resolve the
dispute through alternative dispute resolution as set forth in
Section 1354, civil action, and any other procedures to resolve the
dispute that may be available through the association.(1) The amount
of the assessment in dispute.
(2) Late charges.
(3) Interest.
(4) All reasonable fees and costs associated with the preparation
and filing of a notice of delinquent assessment, including all
mailing costs, and including reasonable attorney's fees not to exceed
four hundred twenty-five dollars ($425).
(b) The right of any owner of a separate interest to utilize
alternative dispute resolution under this section may not be
exercised more than two times in any single calendar year, and not
more than three times within any five calendar years. Nothing within
this section shall preclude any owner of a separate interest and the
association, upon mutual agreement, from entering into alternative
dispute resolution for a number of times in excess of the limits set
forth in this section. The owner of a separate interest may request
and be awarded through alternative dispute resolution reasonable
interest to be paid by the association on the total amount paid under
paragraphs (1) to (4), inclusive, of subdivision (a), if it is
determined through alternative dispute resolution that the assessment
levied by the association was not correctly levied.
SEC. 3. Section 1367.1 of the Civil Code is amended to read:
1367.1. (a) A regular or special assessment and any late charges,
reasonable fees and costs of collection, reasonable attorney's fees,
if any, and interest, if any, as determined in accordance with
Section 1366, shall be a debt of the owner of the separate interest
at the time the assessment or other sums are levied. At least 30 days
prior to recording a lien upon the separate interest of the owner of
record to collect a debt that is past due under this subdivision,
the association shall notify the owner of record in writing by
certified mail of the following:(1) A general description of the
collection and lien enforcement procedures of the association and the
method of calculation of the amount, a statement that the owner of
the separate interest has the right to inspect the association
records, pursuant to Section 8333 of the Corporations Code, and the
following statement in 14-point boldface type, if printed, or in
capital letters, if typed: "IMPORTANT NOTICE: IF YOUR SEPARATE
INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR
ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT ACTION."
(2) An itemized statement of the charges owed by the owner,
including items on the statement which indicate the amount of any
delinquent assessments, the fees and reasonable costs of collection,
reasonable attorney's fees, any late charges, and interest, if any.
(3) A statement that the owner shall not be liable to pay the
charges, interest, and costs of collection, if it is determined the
assessment was paid on time to the association.
(4) The right to request a meeting with the board as provided by
paragraph (3) of subdivision (c).
(5) The right to dispute the assessment debt by submitting a
written request for dispute resolution to the association pursuant to
Article 5 (commencing with Section 1363.810) of Chapter 4 of Title 6
of Part 4 of Division 2.
(6) The right to request alternative dispute resolution with a
neutral third party pursuant to Article 2 (commencing with Section
1369.510) of Chapter 7 of Part 4 of Division 2 before the association
may initiate foreclosure against the owner's separate interest.
(b) Any payments made by the owner of a separate interest toward
the debt set forth, as required in subdivision (a), shall first be
applied to the assessments owed, and, only after the assessments owed
are paid in full shall the payments be applied to the fees and costs
of collection, attorney's fees, late charges, or interest. When an
owner makes a payment, the owner may request a receipt and the
association shall provide it. The receipt shall indicate the date of
payment and the person who received it. The association shall provide
a mailing address for overnight payment of assessments.
(c) (1) An owner may dispute the debt noticed pursuant to
subdivision (a) by submitting to the board a written explanation of
the reasons for his or her dispute. The board shall respond in
writing to the owner within 15 days of the date of the postmark of
the explanation, if the explanation is mailed within 15 days of the
postmark of the notice.
(2)
(c) (1) (A) Prior to recording a lien for delinquent assessments,
an association shall offer the owner and, if so requested by the
owner, participate in dispute resolution pursuant to Article 5
(commencing with Section 1363.810) of Chapter 4 of Title 6 of Part 4
of Division 2.
(B) Prior to initiating a foreclosure for delinquent assessments,
an association shall offer the owner and, if so requested by the
owner, shall participate in dispute resolution pursuant to Article 5
(commencing with Section 1363.810) of Chapter 4 of Title 6 of Part 4
of Division 2 or alternative dispute resolution with a neutral third
party pursuant to Article 2 (commencing with Section 1369.510) of
Chapter 7 of Title 6 of Part 4 of Division 2. The decision to pursue
dispute resolution or a particular type of alternative dispute
resolution shall be the choice of the owner, except that binding
arbitration shall not be available if the association intends to
initiate a judicial foreclosure.
(2) For liens recorded on or after January 1, 2006, the decision
to record a lien for delinquent assessments shall be made only by the
board of directors of the association and may not be delegated to an
agent of the association. The board shall approve the decision by a
majority vote of the board members in an open meeting. The board
shall record the vote in the minutes of that meeting.
(3) An owner, other than an owner of any
interest that is described in Section 11212 of the Business and
Professions Code that is not otherwise exempt from this section
pursuant to subdivision (a) of Section 11211.7, may submit a written
request to meet with the board to discuss a payment plan for the debt
noticed pursuant to subdivision (a). The association shall provide
the owners the standards for payment plans, if any exist. The board
shall meet with the owner in executive session within 45 days of the
postmark of the request, if the request is mailed within 15 days of
the date of the postmark of the notice, unless there is no regularly
scheduled board meeting within that period, in which case the board
may designate a committee of one or more members to meet with the
owner.
(d) The amount of the assessment, plus any costs of collection,
late charges, and interest assessed in accordance with Section 1366,
shall be a lien on the owner's interest in the common interest
development from and after the time the association causes to be
recorded with the county recorder of the county in which the separate
interest is located, a notice of delinquent assessment, which shall
state the amount of the assessment and other sums imposed in
accordance with Section 1366, a legal description of the owner's
interest in the common interest development against which the
assessment and other sums are levied, the name of the record owner of
the owner's interest in the common interest development against
which the lien is imposed. In order for the lien to be enforced by
nonjudicial foreclosure as provided in subdivision (g), the notice of
delinquent assessment shall state the name and address of the
trustee authorized by the association to enforce the lien by sale.
The notice of delinquent assessment shall be signed by the person
designated in the declaration or by the association for that purpose,
or if no one is designated, by the president of the association, and
mailed in the manner set forth in Section 2924b, to all record
owners of the owner's interest in the common interest development no
later than 10 calendar days after recordation. Within 21 days of the
payment of the sums specified in the notice of delinquent assessment,
the association shall record or cause to be recorded in the office
of the county recorder in which the notice of delinquent assessment
is recorded a lien release or notice of rescission and provide the
owner of the separate interest a copy of the lien release or notice
that the delinquent assessment has been satisfied. A monetary charge
imposed by the association as a means of reimbursing the association
for costs incurred by the association in the repair of damage to
common areas and facilities for which the member or the member's
guests or tenants were responsible may become a lien against the
member's separate interest enforceable by the sale of the interest
under Sections 2924, 2924b, and 2924c, provided the authority to
impose a lien is set forth in the governing documents. It is the
intent of the Legislature not to contravene Section 2792.26 of Title
10 of the California Code of Regulations, as that section appeared on
January 1, 1996, for associations of subdivisions that are being
sold under authority of a subdivision public report, pursuant to Part
2 (commencing with Section 11000) of Division 4 of the Business and
Professions Code.
(e) Except as indicated in subdivision (d), a monetary penalty
imposed by the association as a disciplinary measure for failure of a
member to comply with the governing instruments, except for the late
payments, may not be characterized nor treated in the governing
instruments as an assessment that may become a lien against the
member's subdivision separate interest enforceable by the sale of the
interest under Sections 2924, 2924b, and 2924c.
(f) A lien created pursuant to subdivision (d) shall be prior to
all other liens recorded subsequent to the notice of assessment,
except that the declaration may provide for the subordination thereof
to any other liens and encumbrances.
(g) An association may not voluntarily assign or pledge the
association's right to collect payments or assessments, or to enforce
or foreclose a lien to a third party, except when the assignment or
pledge is made to a financial institution or lender chartered or
licensed under federal or state law, when acting within the scope of
that charter or license, as security for a loan obtained by the
association; however, the foregoing provision may not restrict the
right or ability of an association to assign any unpaid obligations
of a former member to a third party for purposes of collection.
Subject to the limitations of this subdivision, after the expiration
of 30 days following the recording of a lien created pursuant to
subdivision (d), the lien may be enforced in any manner permitted by
law, including sale by the court, sale by the trustee designated in
the notice of delinquent assessment, or sale by a trustee substituted
pursuant to Section 2934a. Any sale by the trustee shall be
conducted in accordance with Sections 2924, 2924b, and 2924c
applicable to the exercise of powers of sale in mortgages and deeds
of trust. The fees of a trustee may not exceed the amounts prescribed
in Sections 2924c and 2924d.
(h) Nothing in this section or in subdivision (a) of Section 726
of the Code of Civil Procedure prohibits actions against the owner of
a separate interest to recover sums for which a lien is created
pursuant to this section or prohibits an association from taking a
deed in lieu of foreclosure.
(i) If it is determined that a lien previously recorded against
the separate interest was recorded in error, the party who recorded
the lien shall, within 21 calendar days, record or cause to be
recorded in the office of the county recorder in which the notice of
delinquent assessment is recorded a lien release or notice of
rescission and provide the owner of the separate interest with a
declaration that the lien filing or recording was in error and a copy
of the lien release or notice of rescission.
(j) (1) An association that fails to comply with the procedures
set forth in this section shall, prior to recording a lien,
recommence the required notice process.
(2) Any costs associated with recommencing the notice process
shall be borne by the association and not by the owner of a separate
interest.
(k) This section only applies to liens recorded on or after
January 1, 2003.
(l) This section is subordinate to, and shall be interpreted in
conformity with, Section 1367.4.
SEC. 4. Section 1367.4 is added to the Civil Code , to read:
1367.4. (a) Notwithstanding any law or any provisions of the
governing documents to the contrary, this section shall apply to
debts for assessments that arise on and after January 1, 2006.(b) An
association that seeks to collect delinquent regular or special
assessments of an amount less than two thousand five hundred dollars
($2,500), not including any late charges, fees and costs of
collection, attorney's fees, or interest, may not collect that debt
through judicial or nonjudicial foreclosure, but may attempt to
collect or secure that debt in any of the following ways:
(1) By a civil action in small claims court, pursuant to Chapter
5.5 (commencing with Section 116.110) of Title 1 of the Code of Civil
Procedure. An association that chooses to proceed by an action in
small claims court, and prevails, may enforce the judgment as
permitted under Article 8 (commencing with Section 116.810) of Title
1 of the Code of Civil Procedure. The amount that may be recovered in
small claims court to collect upon a debt for delinquent assessments
may not exceed the jurisdictional limits of the small claims court
and shall be the sum of the following:
(A) The amount owed as of the date of filing the complaint in the
small claims court proceeding.
(B) In the discretion of the court, an additional amount described
in subparagraph (A) equal to the amount owed for the period from the
date the complaint is filed until the estimated date of judgment.
(2) By recording a lien on the owner's separate interest upon
which the association may not foreclose until the amount of the
delinquent assessments secured by the lien, exclusive of any late
charges, fees and costs of collection, attorney's fees, or interest,
equals or exceeds two thousand five hundred dollars ($2,500). An
association that chooses to record a lien under these provisions,
prior to recording the lien, shall offer the owner and, if so
requested by the owner, participate in dispute resolution as set
forth in Article 5 (commencing with Section 1368.810) of Chapter 4.
(3) Any other manner provided by law, except for judicial or
nonjudicial foreclosure.
(c) An association that seeks to collect delinquent regular or
special assessments of an amount of two thousand five hundred dollars
($2,500) or more, not including any late charges, fees and costs of
collection, attorney's fees, or interest, may use judicial or
nonjudicial foreclosure subject to the following conditions:
(1) Prior to initiating a foreclosure on an owner's separate
interest, the association shall offer the owner and, if so requested
by the owner, participate in dispute resolution as set forth in
Article 5 (commencing with Section 1368.810) of Chapter 4 or
alternative dispute resolution as set forth in Article 2 (commencing
with Section 1369.510) of Chapter 7. The decision to pursue dispute
resolution or a particular type of alternative dispute resolution
shall be the choice of the owner, except that binding arbitration
shall not be available if the association intends to initiate a
judicial foreclosure.
(2) The decision to initiate foreclosure of a lien for delinquent
assessments that has been validly recorded shall be made only by the
board of directors of the association and may not be delegated to an
agent of the association. The board shall approve the decision by a
majority vote of the board members in an executive session. The board
shall record the vote in the minutes of that meeting. The board
shall maintain the confidentiality of the owner or owners of the
separate interest by identifying the matter by the parcel number of
the property, rather than the name of the owner or owners.
(3) The board shall provide personal notice to an owner of a
separate interest who occupies the separate interest if the board
votes to foreclose upon the separate interest. The board shall
provide written notice to an owner of a separate interest who does
not occupy the separate interest by first-class mail, postage
prepaid, at the most current address shown on the books of the
association.
(4) A nonjudicial foreclosure by an association to collect upon a
debt for delinquent assessments shall be subject to a right of
redemption. The redemption period within which the separate interest
may be redeemed from a foreclosure sale under this paragraph ends 90
days after the sale.
(5) A nonjudicial or judicial foreclosure by an association to
collect upon a debt for delinquent assessments shall comply with the
following requirements:
(A) The minimum bid shall be at least 65 percent of the appraised
value, excluding any senior liens subject to which the successful
bidder would be taking title.
(B) An appraiser appropriately certified by the Office of Real
Estate Appraisers shall perform the exterior appraisal (using Form
2055 Exterior Only Appraisal). The cost of the appraisal shall be
recouped at sale if the property is auctioned or at cure of the
default prior to sale. The appraisal shall be completed at least 30
days, but no more than 60 days, prior to sale unless, in the event of
a judicial foreclosure, the court orders a different completion
date.
(d) The limitation on foreclosure of assessment liens for amounts
under the stated minimum in this section does not apply to
assessments owed by owners of separate interests in timeshare
estates, as defined in subdivision (x) of Section 11112 of the
Business and Professions Code, or to assessments owed by developers.
SEC. 5. Section 1367.5 is added to the Civil Code, to read:
1367.5. If it is determined through dispute resolution pursuant
to Article 5 (commencing with Section 1363.810) of Chapter 4 of Title
6 of Part 4 of Division 2 or alternative dispute resolution with a
neutral third party pursuant to Article 2 (commencing with Section
1369.510) of Chapter 7 of Title 6 of Part 4 of Division 2 that an
association has recorded a lien
for a delinquent assessment in error, the association shall
promptly reverse all late charges, fees, interest, attorney's fees,
costs of collection, costs imposed for the notice prescribed in
subdivision (a) of Section 1367.1, and costs of recordation and
release of the lien authorized under subdivision (b) of Section
1367.4, and pay all costs related to the dispute resolution or
alternative dispute resolution.
SEC. 6. Section 116.540 of the Code of Civil Procedure is
amended to read:
116.540. (a) Except as permitted by this section, no individual
other than the plaintiff and the defendant may take part in the
conduct or defense of a small claims action.(b) A corporation may
appear and participate in a small claims action only through a
regular employee, or a duly appointed or elected officer or director,
who is employed, appointed, or elected for purposes other than
solely representing the corporation in small claims court.
(c) A party who is not a corporation or a natural person may
appear and participate in a small claims action only through a
regular employee, or a duly appointed or elected officer or director,
or in the case of a partnership, a partner, engaged for purposes
other than solely representing the party in small claims court.
(d) If a party is an individual doing business as a sole
proprietorship, the party may appear and participate in a small
claims action by a representative and without personally appearing if
both of the following conditions are met:
(1) The claim can be proved or disputed by evidence of an account
that constitutes a business record as defined in Section 1271 of the
Evidence Code, and there is no other issue of fact in the case.
(2) The representative is a regular employee of the party for
purposes other than solely representing the party in small claims
actions and is qualified to testify to the identity and mode of
preparation of the business record.
(e) A plaintiff is not required to personally appear, and may
submit declarations to serve as evidence supporting his or her claim
or allow another individual to appear and participate on his or her
behalf, if (1) the plaintiff is serving on active duty in the United
States armed forces Armed Forces
outside this state, (2) the plaintiff was assigned to his or her duty
station after his or her claim arose, (3) the assignment is for more
than six months, (4) the representative is serving without
compensation, and (5) the representative has appeared in small claims
actions on behalf of others no more than four times during the
calendar year. The defendant may file a claim in the same action in
an amount not to exceed the jurisdictional limits stated in Sections
116.220 and 116.231.
(f) A party incarcerated in a county jail, a Department of
Corrections facility, or a Youth Authority facility is not required
to personally appear, and may submit declarations to serve as
evidence supporting his or her claim, or may authorize another
individual to appear and participate on his or her behalf if that
individual is serving without compensation and has appeared in small
claims actions on behalf of others no more than four times during the
calendar year.
(g) A defendant who is a nonresident owner of real property may
defend against a claim relating to that property without personally
appearing by (1) submitting written declarations to serve as evidence
supporting his or her defense, (2) allowing another individual to
appear and participate on his or her behalf if that individual is
serving without compensation and has appeared in small claims actions
on behalf of others no more than four times during the calendar
year, or (3) taking the action described in both (1) and (2).
(h) A party who is an owner of rental real property may appear and
participate in a small claims action through a property agent under
contract with the owner to manage the rental of that property, if (1)
the owner has retained the property agent principally to manage the
rental of that property and not principally to represent the owner in
small claims court, and (2) the claim relates to the rental
property.
(i) A party that is an association created to manage a common
interest development, as defined in Section 1351 of the Civil Code,
may appear and participate in a small claims action through a
management company representative or bookkeeper who appears on behalf
of that association.
(j) At the hearing of a small claims action,
the court shall require any individual who is appearing as a
representative of a party under subdivisions (b) to (h)
(i) , inclusive, to file a declaration stating
(1) that the individual is authorized to appear for the party, and
(2) the basis for that authorization. If the representative is
appearing under subdivision (b), (c), (d), or
(h), or (i), the declaration also shall state that the
individual is not employed solely to represent the party in small
claims court. If the representative is appearing under subdivision
(e), (f), or (g), the declaration also shall state that the
representative is serving without compensation, and has appeared in
small claims actions on behalf of others no more than four times
during the calendar year.
(j)
(k) A husband or wife who sues or who is sued
with his or her spouse may appear and participate on behalf of his
or her spouse if (1) the claim is a joint claim, (2) the represented
spouse has given his or her consent, and (3) the court determines
that the interests of justice would be served.
(k)
(l) If the court determines that a party cannot
properly present his or her claim or defense and needs assistance,
the court may in its discretion allow another individual to assist
that party.
(l)
(m) Nothing in this section shall operate or
be construed to authorize an attorney to participate in a small
claims action except as expressly provided in Section 116.530.
SEC. 7. Section 729.035 is added to the Code of Civil Procedure,
to read:
729.035. Notwithstanding any provision of law to the contrary,
the sale of a separate interest in a common interest development is
subject to the right of redemption within 90 days after the sale if
the sale arises from a foreclosure by the association of a common
interest development pursuant to subdivision (g) of Section 1367.1 of
the Civil Code, subject to the conditions of Section 1367.4 of the
Civil Code.