AB 1703

Bill Subjects

Abstract

Existing law establishes various real estate disclosure requirements applicable to the transfer of residential real property. This bill would require an owner of residential real property, defined to include a single-family residential property that is occupied by a tenant or a multifamily residential property except as specified, to take various actions before offering the residential real property for sale to any purchaser, soliciting any offer to purchase the residential real property, or otherwise entering into a contract for sale of the residential real property. The bill would exempt certain transfers of a residential real property from its provisions, including, among others, a transfer between spouses, domestic partners, parent and child, siblings, grandparent and grandchild, a transfer pursuant to a court order, and a transfer by eminent domain. This bill would require the owner of the residential real property to notify each tenant and each qualified organization, as defined, of the owner's intent to sell the residential real property. The bill would provide each qualified organization with 10 days to notify the property owner of their interest in purchasing the property and further provide a qualified organization with either 60 days or 40 days, depending on the number of units of the property, to submit an offer to purchase the residential real property. The bill would provide that a property owner may sell the property to any party if the property owner does not receive any interest to purchase the property from a qualified organization or receive an offer from a qualified organization within these timeframes. The bill would allow a property owner to reject any offer received from a qualified organization and sell to a party that is not a qualified organization, but would provide a qualified organization that submits a rejected offer with 10 days to invoke a right of first refusal to accept a subsequent offer accepted by the property owner, as specified. This bill would require a qualified organization that purchases a residential real property pursuant to these provisions to retain all existing tenancies and to restrict the units of the property to rents affordable to persons and families of low and moderate income, with the maximum average income of the tenants not to exceed 80% of the area median income, as specified. The bill would provide that these affordability requirements shall be recorded, as specified, and that the affordability requirements are enforceable, as specified. The bill would require the qualified organization to commit to providing the tenants of a single-family residential real property or a current or future resident organization in a multifamily residential real property with 18 months to purchase the entire residential real property, or, if ownership of the land will be retained by a community land trust under a 99-year ground lease, the opportunity to purchase improvements, after the qualified organization takes title of the property. This bill would require the Department of Housing and Community Development to develop a process for qualified organizations, including, among others, a local public entity, eligible nonprofit corporation, limited equity housing cooperative, and resident organizations formed for the purpose of acquiring a multifamily residential real property, to notify the department of their interest in purchasing residential real property. The bill would require the department to maintain a list of those organizations that have submitted this notice on its internet website. The bill would require each owner that sells a residential real property to record, or cause to be recorded, a certification of compliance under penalty of perjury at the time of sale, as specified, and would make failure to file the certificate an infraction punishable as specified. By expanding existing crimes, the bill would impose a state-mandated local program. Existing law imposes various requirements to be satisfied prior to exercising a power of sale under a mortgage or deed of trust. Existing law, with respect to residential real property containing up to 4 dwelling units, requires a mortgagee, trustee, beneficiary, or authorized agent to provide to the mortgagor or trustor a copy of the recorded notice of default and a copy of the recorded notice of sale. This bill would additionally require a mortgagee, trustee, beneficiary, or authorized agent to, upon filing a notice of default, provide to the mortgagor or trustor a list of qualified organizations located within the county of the residential real property, as defined. The bill would also require the mortgagee, trustee, beneficiary, or authorized agent to notify the tenant of the residential real property of the filing of a notice of default. This bill would apply its provisions until January 1, 2023. 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.