VETO ASSEMBLY BILL 980 BEFORE THERE'S NO MORE GOLD IN THE GOLDEN STATE
September 25, 2007
by: Donie Vanitzian, JD
(c) 2007 Vanitzian
How do you spell "hot-air?" Assembly Bill 980.
When I first inquired and voiced outrage about Assembly Bill 980 I was told by the men in suits, "it’s a done deal so forget about fighting it -- butt out," then the phone line went dead.
Assembly Bill 980 is fundamentally flawed and arguably one of the worst bills to hit California. It fails to ipso facto identify "responsible parties" while at the same time failing to provide a meaningful avenue for redress in the event of breach.
The bill purports to be about transfer fees "disclosure" yet exemptions written into the bill totally negate its so-called purpose. The bill is confused, illogical, and serves absolutely no per se purpose other than to raise the costs of doing business in California. The bill provides no penalties against anyone or anything in the process involving said disclosures. Why? Because the bill is not really about "disclosures" -- its really about diverting money from the persons who have it -- to those who don't have it -- to those who want it. It is about equity reclamation during an escrow process that results in a legislated back-door intravenous device sucking money from every individual's bankbook and sending it "elsewhere."
The bill ignores statutory notice requirements as they would pertain to existing transfer fee documents between third parties, and it allows, if not encourages, the creation of such fees. By default the bill defeats certain existing statutory requirements from being implemented to protect consumers from the effects of this legislation. No mechanism in this law details the notice requirements that should exist but are instead circumvented because of this bill.
The bill is about creating statutory "exemptions" for, and to, any disclosures whether existing or created at a later date. Don't believe it? Read what the bill "does not include." The unfortunate reality is that once this bill passes, the otherwise unrecordable document becomes legitimate by default and lasts in perpetuity. This legislature has not provided a mechanism to remove said recordations and it is because of that omission and the snowball effects of this bill, that it should be considered a dangerous piece of legislation.
The legislature should be concentrating their efforts on curtailing the massive influx of unrecordable documents presently being recorded at the County Recorder's office. I write about this problem in my book, "Common Interest Developments--Homeowners Guide" (Thomson-West). Rather than passing frivolous feel-good legislation fueled by special interests, the legislature owes a duty to taxpayers of this state to understand the legal implications of every law that they pass. Presently, that does not appear to be happening.
Assembly Bill 980 creates an area of law by default that causes a free-for-all for anyone to record at will, whatever the hell they want and without anything more, claim because they disclosed it, it stands. But perhaps the worse part of Assembly Bill 980 are its unmitigated exemptions leaving millions of unsuspecting buyers, sellers, and owners open to the whims of anyone who records a document against their titles.
On taking office, Governor Schwarzenegger promised to return California’s Legislature to the "people." All I can say to that is: Have you ever tried to speak directly with your legislator? Good Luck!
The 79,300 members of Home Owners Against Association Tyranny and Manipulation (HOAATM) have written hundreds of letters to various Assembly and Senate Committees, Assemblymember Calderon, and Governor Schwarzenegger, only to be ignored. Simply, we don’t want any more documents recorded on our titles and we don’t want and we don't need Assembly Bill 980.
How bad is Assembly Bill 980? You decide:
All but halt 1031 property exchanges;
By default, alter and/or prevent every existing and future homestead exemption;
Complicate home ownership and refinancing;
Complicate ownership of any residential and commercial real property;
Create a substantial change in the way business is conducted;
Cause restrictions, if not altogether eliminate the already fragile "rental" market
Cause an influx of liability and litigation;
Create a fiscal impact on the state;
Cost every taxpayer more money;
Conflicts with numerous existing statutes to cause havoc in implementation;
Determine what private property owners can and can’t do with their property;
Exempts the very individuals it needs to protect;
Finish off mobile homeownership and sales;
Have a chilling effect on commerce (who would want to buy California property?);
Increase necessary paperwork related to owning, buying, or selling any property;
Increase insurance costs for owners, buyers, and sellers;
Increase insurance costs for real estate professionals;
Increase costs of escrow and time spent in escrow;
Increase dues that are paid by mandate to trade organizations;
Place unnecessary compliance requirements on Real Estate professionals;
Raise the cost of doing business in California;
Revives, by default the Foreign Investment Real Property Tax Act (FIRPTA);
Work with other laws to handcuff consumer freedoms.
Presently, an otherwise uncomplicated sale of real property entails days of purchasing "required" reports, completing pages on pages of "required" forms -- many are unnecessary.
One out-of-touch-with-reality sponsor of Assembly Bill 980 is the California Association of Realtors. It states: "CAR is sponsoring Assembly Bill Number 980 to require a separate document be recorded that discloses the transfer fee payment obligation. Recordation of a separate document will insure that the transfer fee payment requirement is brought to the attention of prospective homebuyers." It is this author’s opinion that CAR has been substantially responsible for "porking up" and complicating real property sales resulting massive delays in escrow and increased costs of doing business.
The California Association of Realtors has been successful in making the sale and purchase of property so complicated that contracting parties are "forced" to engage the services of real estate personnel AND attorneys. The once single-page purchase agreement is now so long, dense, and complicated that no one understands it. If anything, the public is skeptical about what they are being asked to sign and angry at the beefed up costs associated with real property sales transactions. Sales agents that write to me admit they don’t understand the language in the forms, they don't read it, and they have just given up trying to comply with all these ridiculous rules and threats for so-called non-compliance. Many individuals are now placing their properties "For Sale By Owner" and refusing to cooperate with agents and brokers. These buyers and sellers are now bypassing any involvement with the California Association of Realtors by requiring the contracting parties to either waive or sign off on all such industry-injected language just to be able to conduct and close their sales.
Assembly Bill 980 was ill thought out and if passed, will force the public to become dependent on a bureaucracy the state cannot sustain. Sadly, the implications of this bad bill won't be felt until it is too late to stop it.
The members of HOAATM respectfully ask the Governor to Veto Assembly Bill 980.
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