Some new HOA laws go into effect in October

Editor's note: Barbara Holland takes a break from her question-and answer format to talk about the recent legislative session.

This is the last of a four-part series of the 2011 legislative laws that were passed that govern homeowners associations. If you missed any of the previous articles, just contact me and I will send them to you.

SB 222, which pertains to rentals, becomes effective Oct. 1. If the homeowners association requires a unit owner, who leases his or her unit, to register tenants or submit a copy of the rental agreement, the association may not charge a fee for the registration or submission of the information.

It can only require a copy of the agreement from the unit owner. A registration form still can be used in order to obtain contact information. This law does not preclude the fining of the owner for not submitting the lease or rental agreement, as long as proper notice was sent to the owner.

SB 417, which began June 4 for the purpose of adopting regulations, and will go into effect Oct. 1 for all other purposes, provides for the placement of recycling containers in certain locations.

The first part of the law authorizes the State Environmental Commission to adopt regulations establishing minimum standards for the placement of recycling containers on the premises of apartment communities and condominiums where those services are provided. The Division of Environmental Protection shall adopt a model plan for the placements of the containers.

This past year, Republic Services began contacting management companies of apartment communities to begin the installation of recycling containers. It provided tools to the management companies to help educate the residents. Contact Jack Zaher at Republic Services at 702-599-5523 to request a company representative to visit your community to workout the logistics.

The final bill to be discussed is AB 271, which pertains to transfer fees. It received a lot of publicity and debate this past legislative session. This bill regulates the imposition of private transfer fee obligations upon the transfer of an interest in real property. The law defines "private transfer fee obligation" to mean an obligation from a declaration, covenant or contractual agreement that requires the payment of a private transfer fee to the declarant (developer) or other persons.

The definition does not include the down payment or additional consideration payable by the buyer upon any subsequent appreciation, development or sale of the property if the additional consideration is payable on a one-time basis only and that the obligation to make payment does not bind successors in title to the property.

It does not include real estate sales commissions, or any other fees required by the lender who is providing a loan on the property, rent, reimbursement or other fee payable by a lessee to a lessor under a lease, an option to purchase or to a right of first refusal and governmental fees.

The definition does not include a fee or charge payable to the master association developer of a planned community by the first purchaser.

Finally, the definition of private transfer fee does not include "a fee, charge, assessment, fine or other amount payable to an association."

It is recommended that you have your legal counsel review this law. Many associations have management agreements in which the transfer fees are made payable to the management company in compensation for the processing of new homeowners. You may have to modify your procedures by having the transfer fees made payable to the association that then in turn reimburses the management company.

Section 9 states that the Legislature has now deemed private transfer fees (note the exclusions above) to be in violation of public policy by impairing the marketability and the transferability of real property and by constituting an unreasonable restraint on the alienation of real property, (pretty strong language).

A private transfer fee created or recorded after the effective date of this bill will be void and unenforceable.

Sections 11 and 12 state that if a private transfer fee was created before the effective date of this bill, the payee is to record on or before July 31, 2012, at the county recorder's office where the property is located, a notice which includes the following: the title to read, "Notice of Private Transfer Fee Obligation" in not less than 14 point boldface type, the legal description of the property, the amount of the private transfer fee or the method of calculation, if the property is residential, the amount of the private transfer fee that would be imposed on the sale of a home for $100,000, $250,000 and $500,000.

In addition, the notice shall state the date or circumstances under which the private transfer fee obligation expires, the purpose for which the money will be used, the name, address and phone number of the payee, the notarized signature of the payee or authorized officer or employee of the entity. If there are any changes, the payee may record an amendment to the notice.

Section 13 imposes civil liability upon a person who fails to comply with the requirements of this new law. In addition, if the payee fails to comply with the requirements, the private transfer fee is void and unenforceable and that the subject property can be conveyed free and clear of the private transfer fee obligation.

Section 14 revises the disclosure statement that a seller prepares to furnish a written statement to now disclose the existence of a private transfer fee obligation to the subject property that is being sold, a description of the private transfer fee obligation and to include information concerning the applicable state law and the effect that such an obligation may have on the value of the property.

As previously noted, this is a complex bill that warrants review by your legal counsel.

If you have missed any of the legislative updates, you will soon be able to find them on my website, hlrealty.com.

Barbara Holland, certified property manager, is president and owner of H&L Realty and Management Co. To ask her a question, email support@hlrealty.com.