CICP’s model marketing disclosures – information housing consumers should (but likely don’t) receive from builders or real estate agents or read in their ads and/or sales literature.
 

Model disclosure for residential property situated in condominium developments

(Name of development) is a condominium development pursuant to California Civil Code section 1351(f), a provision of the Davis-Stirling Common Interest Development Act of 1985, Civil Code section 1350 et. seq.  PURCHASING RESIDENTIAL PROPERTY IN THIS TYPE OF DEVELOPMENT INCLUDES A COMPLEX BUNDLE OF RIGHTS AND OBLIGATIONS THAT DIFFERS SUBSTANTIALLY FROM SINGLE FAMILY HOME DEVELOPMENTS.  FOR EXAMPLE, THE BUILDINGS AND LAND ARE OWNED IN COMMON BY ALL PROPERTY OWNERS IN THE DEVELOPMENT.  The use of residential property in this development is governed by deed restrictions known as Covenants, Conditions & Restrictions (CC&Rs) which are binding upon and enforceable by each and every property owner in the development.

While (name of development) is subject to the jurisdiction of municipal and/or county authorities, it is primarily governed by a non-profit mutual benefit membership corporation known as a homeowners association, of which every unit owner is a voting member.  The powers, obligations and rights of this corporation and its members are set forth in California Corporations Code sections 7110-7160; 7210-7215; 7220-7225; 7230-7238; 7510-7517; 7520-7527; 7610-7616; 8310-8338; as well as sections 5033, 5034, 7312 and 7341.  In addition, various provisions of the Davis-Stirling Act delineate additional powers, duties and rights and obligations of the homeowners association and its members.

THERE IS NO STATE OVERSIGHT AGENCY EMPOWERED TO ENFORCE THE DAVIS-STIRLING COMMON INTEREST DEVELOPMENT ACT; VIOLATIONS OF THE ACT MUST BE ENFORCED IN A COURT OF COMPETENT JURISDICTION AT THE EXPENSE OF THE PARTY SEEKING ENFORCEMENT.  THE CORPORATIONS CODE IS ENFORCED AT THE DISCRETION OF THE STATE ATTORNEY GENERAL’S OFFICE.  SINCE ENFORCEMENT BY THAT OFFICE IS DISCRETIONARY, YOU MAY BE REQUIRED TO RETAIN AN ATTORNEY AT YOUR OWN EXPENSE TO REMEDY CORPORATIONS CODE VIOLATIONS BY THE HOMEOWNERS ASSOCIATION.  IN ADDITION, DISPUTES OVER THE INTERPRETATION AND APPLICATION OF THE CC&Rs MAY BE REQUIRED TO BE RESOLVED THROUGH ALTERNATIVE DISPUTE RESOLUTION RATHER THAN COURT LITIGATION.

As a common interest community, (name of development) is intended to be self-governing and therefore requires a significantly greater commitment of time and effort by property owners than a traditional single family home subdivision.  As a property owner in (name of development), you will be required to elect a board of directors of the homeowners association from among other homeowners in the community and may be requested to serve on the board and/or its advisory and architectural control committees.  While serving as a director of (name of development), you will be required to act as a fiduciary for and in the best interests of all property owners in managing the business and legal affairs of the homeowners association.

The homeowners association is empowered to enforce the CC&Rs and may also promulgate rules based on the CC&Rs governing matters such as modifications to the exterior of your unit, parking of vehicles, and keeping of pets.  If the association has adopted a published schedule of fines for violations of these rules, you may be assessed fines if you are found in violation by the governing board.

As a homeowner in this community, you will be required to pay regular (and possibly additional special and emergency) assessments to the association to fund expenses related to the repair, maintenance and preservation of common area property such building components, recreational facilities, and open space areas as well as administrative expenses for management, legal and accounting services.  THERE ARE NO PROPERTY TAX OFFSETS CURRENTLY AVAILABLE FOR PAYMENT OF THESE ASSESSMENTS, NOR ARE THEY DEDUCTIBLE FOR INCOME TAX PURPOSES IF THE PROPERTY IS TO BE HELD AS YOUR PRIMARY RESIDENCE.  FAILURE TO PAY THESE ASSESSMENTS COULD RESULT IN A LIEN PLACED UPON YOUR PROPERTY AND POSSIBLE SALE BY THE HOMEOWNERS ASSOCIATION IN A NON-JUDICIAL FORECLOSURE PROCEEDING; CONSULT THE ASSOCIATION’S COLLECTION POLICY FOR FURTHER DETAILS.

(Name of development) is a planned unit development pursuant to California Civil Code section 1351(k), a provision of the Davis-Stirling Common Interest Development Act of 1985, Civil Code section 1350 et. seq.  PURCHASING RESIDENTIAL PROPERTY IN THIS TYPE OF DEVELOPMENT INCLUDES A COMPLEX BUNDLE OF RIGHTS AND OBLIGATIONS THAT DIFFERS SUBSTANTIALLY FROM RESIDENTIAL PROPERTY LOCATED IN TRADITIONAL SINGLE FAMILY HOME SUBDIVISIONS.  The use of residential property in this development is governed by deed restrictions known as Covenants, Conditions & Restrictions (CC&Rs) which are binding upon and enforceable by each and every property owner in the development.

While (name of development) is subject to the jurisdiction of municipal and/or county authorities, it is primarily governed by a non-profit mutual benefit membership corporation known as a homeowners association, of which every unit owner is a voting member.  The powers, obligations and rights of this corporation and its members are set forth in California Corporations Code sections 7110-7160; 7210-7215; 7220-7225; 7230-7238; 7510-7517; 7520-7527; 7610-7616; 8310-8338; as well as sections 5033, 5034, 7312 and 7341.  In addition, various provisions of the Davis-Stirling Act delineate additional powers, duties and rights and obligations of the homeowners association and its members.

THERE IS NO STATE OVERSIGHT AGENCY EMPOWERED TO ENFORCE THE DAVIS-STIRLING COMMON INTEREST DEVELOPMENT ACT; VIOLATIONS OF THE ACT MUST BE ENFORCED IN A COURT OF COMPETENT JURISDICTION AT THE EXPENSE OF THE PARTY SEEKING ENFORCEMENT.  THE CORPORATIONS CODE IS ENFORCED AT THE DISCRETION OF THE STATE ATTORNEY GENERAL’S OFFICE.  SINCE ENFORCEMENT BY THAT OFFICE IS DISCRETIONARY, YOU MAY BE REQUIRED TO RETAIN AN ATTORNEY AT YOUR OWN EXPENSE TO REMEDY CORPORATIONS CODE VIOLATIONS BY THE HOMEOWNERS ASSOCIATION.  IN ADDITION, DISPUTES OVER THE INTERPRETATION AND APPLICATION OF THE CC&Rs MAY BE REQUIRED TO BE RESOLVED THROUGH ALTERNATIVE DISPUTE RESOLUTION RATHER THAN COURT LITIGATION.

As a common interest community, (name of development) is intended to be self-governing and therefore requires a significantly greater commitment of time and effort by property owners than a traditional single family home subdivision.  As a property owner in (name of development), you will be required to elect a board of directors of the homeowners association from among other homeowners in the community and may be requested to serve on the board and/or its advisory and architectural control committees.  While serving as a director of (name of development), you will be required to act as a fiduciary for and in the best interests of all property owners in managing the business and legal affairs of the homeowners association.

The homeowners association is empowered to enforce the CC&Rs and may also promulgate rules based on the CC&Rs governing matters such as paint color of your home, modifications to its exterior, fences, landscaping, placement of trash cans and stored items, parking of vehicles, and keeping of pets.  If the association has adopted a published schedule of fines for violations of these rules, you may be assessed fines if you are found in violation by the governing board.

As a homeowner in this community, you will be required to pay regular (and possibly additional special and emergency) assessments to the association to fund expenses related to the repair, maintenance and preservation of common area property such as roads, clubroom and other buildings, recreational facilities, and open space areas as well as administrative expenses for management, legal and accounting services.  THERE ARE NO PROPERTY TAX OFFSETS CURRENTLY AVAILABLE FOR PAYMENT OF THESE ASSESSMENTS, NOR ARE THEY DEDUCTIBLE FOR INCOME TAX PURPOSES IF THE PROPERTY IS TO BE HELD AS YOUR PRIMARY RESIDENCE.  FAILURE TO PAY THESE ASSESSMENTS COULD RESULT IN A LIEN PLACED UPON YOUR PROPERTY AND POSSIBLE SALE BY THE HOMEOWNERS ASSOCIATION IN A NON-JUDICIAL FORECLOSURE PROCEEDING; CONSULT THE ASSOCIATION’S COLLECTION POLICY FOR FURTHER DETAILS.