Civil Code Section 1368 (with new items added in 2012)

1368. SALE OR TRANSFER OF TITLE TO CID PROPERTIES; PROVISION OF INFORMATION TO PROSPECTIVE PURCHASERS; COPIES; FEES; VIOLATIONS; PENALTIES AND ATTORNEYS FEES; VALIDITY OF TITLE TRANSFERRED IN VIOLATION; ADDITIONAL REQUIREMENTS. [2012 Changes highlighted in green.]

(a) The owner of a separate interest, other than an owner subject to the requirements of Section 11018.6 of the Business and Professions Code (which refers to lots or parcels offered by a subdivider after repossession), shall, as soon as practicable before transfer of title to the separate interest or execution of a real property sales contract therefor, as defined in Section 2985, provide the following to the prospective purchaser:  

(1)       A copy of the governing documents of the common interest development, including any operating rules, and including a copy of the association's articles of incorporation, or, if not incorporated, a statement in writing from an authorized representative of the association that the association is not incorporated.

(2)       If there is a restriction in the governing documents limiting the occupancy, residency, or use of a separate interest on the basis of age in a manner different from that provided in Section 51.3, a statement that the restriction is only enforceable to the extent permitted by Section 51.3 and a statement specifying the applicable provisions of Section 51.3.

(3)       A copy of the most recent documents distributed pursuant to Section 1365.

(4)       A true statement in writing obtained from an authorized representative of the association as to the amount of the association's current regular and special assessments and fees, any assessments levied upon the owner's interest in the common interest development that are unpaid on the date of the statement, and any monetary fines or penalties levied upon the owner's interest and unpaid on the date of the statement. The statement obtained from an authorized representative shall also include true information on late charges, interest, and costs of collection which, as of the date of the statement, are or may be made a lien upon the owner's interest in a common interest development pursuant to Section 1367 or 1367.1

(5)          A copy or a summary of any notice previously sent to the owner pursuant to subdivision (h) of Section 1363 that sets forth any alleged violation of the governing documents that remains unresolved at the time of the request. The notice shall not be deemed a waiver of the association's right to enforce the governing documents against the owner or the prospective purchaser of the separate interest with respect to any violation. This paragraph shall not be construed to require an association to inspect an owner's separate interest.

(6)          A copy of the initial list of defects provided to each member of the association pursuant to Section 1375, unless the association and the builder subsequently enter into a settlement agreement or otherwise resolve the matter and the association complies with Section 1375.1. Disclosure of the preliminary list of defects pursuant to this paragraph does not waive any privilege attached to the document. The initial list of defects shall also include a statement that a final determination as to whether the list of defects is accurate and complete has not been made.

(7)          A copy of the latest information provided for in Section 1375.1.

(8)          Any change in the association's current regular and special assessments and fees which have been approved by the association's board of directors, but have not become due and payable as of the date disclosure is provided pursuant to this subdivision.

(9)           If there is a provision in the governing documents that prohibits the rental or leasing of any of the separate interests in the common interest development to a renter, lessee, or tenant, a statement describing the prohibition and its applicability.

(10)       If requested by the prospective purchaser, a copy of the minutes of the meetings, excluding meetings held in executive session, of the association's board of directors, conducted over the previous 12 months, that were approved by the association's board of directors.

(b) Upon written request, an association shall, within 10 days of the mailing or delivery of the request, provide the owner of a separate interest with a copy of the requested items specified in paragraphs (1) to (10), inclusive, of (a). Upon receipt of a written request, on the form described in Section 1368.2, the association shall provide a written or electronic estimate of the fees that will be assessed for providing the requested documents.

The documents required to be made available pursuant to this section may be maintained in electronic form, and may be posted on the Association's Internet Web site. Requesting parties shall have the option of receiving the documents by electronic transmission if the association maintains the documents in electronic form. The association may collect a reasonable fee for the procurement, preparation, reproduction, and delivery of the documents requested pursuant to the provisions of this section.    

    (2) No additional fees may be charged by the association for the electronic delivery of the documents requested.

     (3) Fees for any documents required by this section shall be distinguished from other fees, fines, or assessments billed as part of the transfer or sales transaction. Delivery of the documents required by this section shall not be conditioned upon, or required to be combined with, any other documents, items, or services.

     (4) An association may contract with any person or entity to facilitate compliance with the requirements of this subdivision on behalf of the association, subject to the same standards required of the association.

     (5) The association shall also provide a recipient authorized by the owner of a separate interest with a copy of the completed form specified in Section 1368.2 at the time the required documents are delivered.

(c) (1) Except as provided in paragraph (2), neither an association nor a community service organization or similar entity may impose or collect any assessment, penalty, or fee in connection with a transfer of title or any other interest except for the following:    

  (A) An amount not to exceed the association's actual costs to change its records.
  (B) An amount authorized by subdivision (b).

  (2) The amendments made to this subdivision by the act adding this paragraph do not apply to a community service organization or similar entity, or to a nonprofit entity that provides services to a common interest development under a declaration of trust, that is described in subparagraph (A) or (B)  

(A)       The community service organization or similar entity satisfies both of the following    requirements:

(i)            The community service organization or similar entity was established prior to February 20, 2003.

(ii)           The community service organization or similar entity exists and operates, in whole or in part, to fund or perform environmental mitigation or to restore or maintain wetlands or native habitat, as required by the state or local government as an express written condition of development.

The community service organization or similar entity that provides services to a common interest development under a declaration of trust satisfies all of the following requirements:  

(i)            The community service organization or similar entity is not an organization or entity described in subparagraph (A).

(ii)           The community service organization or similar entity was established and received a transfer fee prior to January 1, 2004.

(iii)          On and after January 1, 2006, the community service organization or similar entity offers a purchaser the following payment options for the fee or charge it collects at time of transfer:

(I)        Paying the fee or charge at the time of transfer.

(II)       Paying the fee or charge pursuant to an installment payment plan for a period of not less than seven years. If the purchaser elects to pay the fee or charge in installment payments, the community service organization or similar entity may also collect additional amounts that do not exceed the actual costs for billing and financing on the amount owed. If the purchaser sells the separate interest before the end of the installment payment plan period, he or she shall pay the remaining balance prior to transfer.

(3)    For the purposes of this subdivision, a ''community service organization or similar entity'' means a nonprofit entity, other than an association, that is organized to provide services to residents of the common interest development or to the public in addition to the residents, to the extent community common areas or facilities are available to the public. A ''community service organization or similar entity'' does not include an entity that has been organized solely to raise money and contribute to other nonprofit organizations that are qualified as tax exempt under Section 501(c)(3) of the Internal Revenue Code and that provide housing or housing assistance.  

(d) Any person or entity who willfully violates this section shall be is liable to the purchaser of a separate interest which that is subject to this section for actual damages occasioned thereby and, in addition, shall pay a civil penalty in an amount not to exceed five hundred dollars ($500). In an action to enforce this liability, the prevailing party shall be awarded reasonable attorneys' fees.

  (e) Nothing in this section affects the validity of title to real property transferred in violation of this section.

  (f) In addition to the requirements of this section, an owner transferring title to a separate interest shall comply with applicable requirements of Sections 1133 and 1134.

  (g) For the purposes of this section, a person who acts as a community association manager is an agent, as defined in Section 2297, of the association.

 

****************************

Entire Form Below is New

1368.2.DISCLOSURE OF CHARGES FOR DOCUMENTS PROVIDED AS REQUIRED BY SECTION 1368:

  The form for billing disclosures required by Section 1368 shall be in substantially the following form:

  (Note, some associations will be modifying the form to lump together documents that are usually provided together, for example, meshing the Articles of Incorporation, Bylaws and CC&Rs into one group called "Governing Documents".)

  CHARGES FOR DOCUMENTS PROVIDED AS REQUIRED BY SECTION 1368

  Property Address __________________________________________________

  Owner of Property _________________________________________________

  Owner's Mailing Address ____________________________________________
 (If known or different from property address.)

Provider of the Section 1368 Items:

________________________    ______________________________________
Print Name                                  Position or Title Association or Agent

__________________________
Date Form Completed

Check or Complete Applicable Column or Columns Below:

                                   

Document	Civil Code  Section	Included	Not Available (N/A) or   or Not Applicable (N/App)
Articles of Incorporation or statement that not incorporated.	Section1368(a)(1)	___________	___________
CC&Rs	Section 1368(a)(1)	___________	___________
Bylaws	Section 1368(a)(1)	___________	___________
Operating Rules	Section 1368(a)(1)	___________	___________
Age restrictions,if any	Section1368(a)(2)	___________	___________
Pro forma operating budget or summary includingreserve study	Sections 1365 and1368(a)(3)	___________	___________
Assessment and reserve funding disclosure summary	Sections 1365 and 1368(a)(4)	___________	___________
Financial  statement review	Sections 1365 and  1368(a)(3)	___________	___________
Assessment enforcement policy	Sections 1365 and 1368(a)(4)	___________	___________
Insurance summary	Sections 1365 and  1368(a)(3)	___________	___________
Regular  assessment	Section1368(a)(4)	___________	___________
Special  assessment	Section  1368(a)(4)	___________	___________
Emergency assessment	Section 1368(a)(4)	___________	___________
Other unpaid obligations of seller	Sections 1367.1 and 1368(a)(4)	___________	___________
Approved changes to assessments	Sections 1365 and 1368(a)(4),(8)	___________	___________
Settlement notice regarding common area defects	Sections 1368(a)(6),  (7) and    1375.1	___________	___________
Preliminary list of defects	Sections 1368(a)(6), 1375, and 1375.1	___________	___________
Notice(s) of violation	Sections 1363 and 1368(a)(5)	___________	___________
Required statement of fees	Section 1368	___________	___________
Minutes of regular meetings of the board of directors  conducted over the previous 12 months, if requested	Section 1368(a)(10)	___________	___________
	Total fees for  these documents:	$___________

* The information provided by this form may not include all fees that may be imposed before the close of escrow. Additional fees that are not related to the requirements of Section 1368 may be charged separately.

  *************************************************************