SECTIONS 11000-11008 - California Statutes

BUSINESS AND PROFESSIONS CODE

SECTION 11000-11008

11000. (a) "Subdivided lands" and "subdivision" refer to improved
or unimproved land or lands, wherever situated within California,
divided or proposed to be divided for the purpose of sale or lease or
financing, whether immediate or future, into five or more lots or
parcels. However, land or lands sold by lots or parcels of not less
than 160 acres which are designated by lot or parcel description by
government surveys and appear as such on the current assessment roll
of the county in which the land or lands are situated shall not be
deemed to be "subdivided lands" or "a subdivision" within the meaning
of this section, unless the land or lands are divided or proposed to
be divided for the purpose of sale for oil and gas purposes, in
which case the land or lands shall be deemed to be "subdivided lands"
or "a subdivision" within the meaning of this section. This chapter
also does not apply to the leasing of apartments, offices, stores, or
similar space within an apartment building, industrial building,
commercial building, or mobilehome park, as defined under Section
18214 of the Health and Safety Code, except that the offering of
leases for a term in excess of five years to tenants within a
mobilehome park as a mandatory requirement and prerequisite to
tenancy within the mobilehome park shall be subject to the provisions
of this chapter. The leasing of apartments in a community apartment
project, as defined in Section 11004 in an apartment or similar space
within a commercial building or complex, shall be subject to the
provisions of this chapter.
(b) Nothing in this section shall in any way modify or affect any
of the provisions of Section 66424 of the Government Code.
(c) Subdivisions, as defined in Section 10249.1, which are located
entirely outside California shall be exempt from the provisions of
this part.

11000.1. (a) "Subdivided lands" and "subdivision," as defined by
Sections 11000 and 11004.5, also include improved or unimproved land
or lands, a lot or lots, or a parcel or parcels, of any size, in
which, for the purpose of sale or lease or financing, whether
immediate or future, five or more undivided interests are created or
are proposed to be created.
(b) This section does not apply to the creation or proposed
creation of undivided interests in land if any one of the following
conditions exists:
(1) The undivided interests are held or to be held by persons
related one to the other by blood or marriage.
(2) The undivided interests are to be purchased and owned solely
by persons who present evidence satisfactory to the Real Estate
Commissioner that they are knowledgeable and experienced investors
who comprehend the nature and extent of the risks involved in the
ownership of these interests. The Real Estate Commissioner shall
grant an exemption from this part if the undivided interests are to
be purchased by no more than 10 persons, each of whom furnishes a
signed statement to the commissioner that he or she (A) is fully
informed concerning the real property to be acquired and his or her
interest in that property including the risks involved in ownership
of undivided interests, (B) is purchasing the interest or interests
for his or her own account and with no present intention to resell or
otherwise dispose of the interest for value, and (C) expressly
waives protections afforded to a purchaser by this part.
(3) The undivided interests are created as the result of a
foreclosure sale.
(4) The undivided interests are created by a valid order or decree
of a court.
(5) The offering and sale of the undivided interests have been
expressly qualified by the issuance of a permit from the Commissioner
of Corporations pursuant to the Corporate Securities Law of 1968
(Division 1 (commencing with Section 25000) of Title 4 of the
Corporations Code).

11000.2. (a) A person who has made an offer to purchase an interest
in an undivided-interest subdivision specified in subdivision (a)
of, and not exempted by subdivision (b) of, Section 11000.1 shall
have the right to rescind any contract resulting from the acceptance
of that offer until midnight of the third calendar day following the
day on which the prospective purchaser executed the offer to
purchase.
(b) The owner of a subdivision subject to this section or his or
her agent shall, in accordance with regulations adopted by the Real
Estate Commissioner, clearly and conspicuously disclose to all
prospective purchasers of undivided interests the right of rescission
provided for in subdivision (a), and shall furnish to each offeror a
form, as prescribed by regulations of the commissioner, for the
exercise of the right of rescission.
(c) Any certificate bearing the signature of the purchaser of an
interest in an undivided-interest subdivision subject to this section
which contains an adequate description of the interest or interests
sold and a statement by the purchaser that he or she has not
exercised the right of rescission within the time limit set forth in
subdivision (a) shall constitute conclusive evidence that the right
of rescission has not been exercised in any matter involving the
rights of a third party who has acted in good faith in reliance upon
representations in the certificate.

11001. The Real Estate Commissioner (hereafter referred to in this
chapter as the commissioner) may adopt, amend, or repeal such rules
and regulations as are reasonably necessary for the enforcement of
this chapter. He may issue any order, permit, decision, demand or
requirement to effect this purpose. Such rules, regulations, and
orders shall be adopted pursuant to the provisions of the
Administrative Procedure Act.

11003. "Planned development" has the same meaning as specified in
subdivision (k) of Section 1351 of the Civil Code.

11003.2. "Stock cooperative" has the same meaning as specified in
subdivision (m) of Section 1351 of the Civil Code, except that, as
used in this chapter, a "stock cooperative" does not include a
limited-equity housing cooperative.

11003.4. (a) A "limited-equity housing cooperative" or a "workforce
housing cooperative trust" is a corporation that meets the criteria
of Section 11003.2 and that also meets the criteria of Sections 817
and 817.1 of the Civil Code, as applicable. Except as provided in
subdivision (b), a limited-equity housing or workforce housing
cooperative trust shall be subject to all the requirements of this
chapter pertaining to stock cooperatives.
(b) A limited-equity housing cooperative or a workforce housing
cooperative trust shall be exempt from the requirements of this
chapter if the limited-equity housing cooperative or workforce
housing cooperative trust complies with all the following conditions:
(1) The United States Department of Housing and Urban Development,
the United States Department of Agriculture, the National Consumers
Cooperative Bank, the California Housing Finance Agency, the Public
Employees' Retirement System (PERS), the State Teachers' Retirement
System (STRS), the Department of Housing and Community Development,
or the Federal Home Loan Bank System or any of its member
institutions, alone or in any combination with each other, or with
the city, county, school district, or redevelopment agency in which
the cooperative is located, directly finances or subsidizes at least
50 percent of the total construction or development cost or one
hundred thousand dollars ($100,000), whichever is less; or the real
property to be occupied by the cooperative was sold or leased by the
Department of Transportation, other state agency, a city, a county,
or a school district for the development of the cooperative and has a
regulatory agreement approved by the Department of Housing and
Community Development for the term of the permanent financing,
notwithstanding the source of the permanent subsidy or financing.
(2) No more than 20 percent of the total development cost of a
limited-equity mobilehome park, and no more than 10 percent of the
total development cost of other limited-equity housing cooperatives,
is provided by purchasers of membership shares.
(3) A regulatory agreement that covers the cooperative for a term
of at least as long as the duration of the permanent financing or
subsidy, notwithstanding the source of the permanent subsidy or
financing has been duly executed between the recipient of the
financing and either (A) one of the federal or state agencies
specified in paragraph (1) or (B) a local public agency that is
providing financing for the project under a regulatory agreement
meeting standards of the Department of Housing and Community
Development. The regulatory agreement shall make provision for at
least all of the following:
(A) Assurances for completion of the common areas and facilities
to be owned or leased by the limited-equity housing cooperative,
unless a construction agreement between the same parties contains
written assurances for completion.
(B) Governing instruments for the organization and operation of
the housing cooperative by the members.
(C) The ongoing fiscal management of the project by the
cooperative, including an adequate budget, reserves, and provisions
for maintenance and management.
(D) Distribution of a membership information report to any
prospective purchaser of a membership share, prior to purchase of
that share. The membership information report shall contain full
disclosure of the financial obligations and responsibilities of
cooperative membership, the resale of shares, the financing of the
cooperative including any arrangements made with any partners,
membership share accounts, occupancy restrictions, management
arrangements, and any other information pertinent to the benefits,
risks, and obligations of cooperative ownership.
(4) The federal, state, or local public agency that executes the
regulatory agreement shall satisfy itself that the bylaws, articles
of incorporation, occupancy agreement, subscription agreement, any
lease of the regulated premises, any arrangement with partners, and
arrangement for membership share accounts provide adequate protection
of the rights of cooperative members.
(5) The federal or state agency shall receive from the attorney
for the recipient of the financing or subsidy a legal opinion that
the cooperative meets the requirements of Section 817 of the Civil
Code and the exemption provided by this section.
(c) Any limited-equity cooperative, or workforce housing
cooperative trust that meets the requirements for exemption pursuant
to subdivision (b) may elect to be subject to all provisions of this
chapter.
(d) The developer of the cooperative shall notify the Department
of Real Estate, on a form provided by the department, that an
exemption is claimed under this section. The Department of Real
Estate shall retain this form for at least four years for statistical
purposes.

11004. "Community apartment project" has the same meaning as
specified in subdivision (d) of Section 1351 of the Civil Code.

11004.5. In addition to any provisions of Section 11000, the
reference in this code to "subdivided lands" and "subdivision" shall
include all of the following:
(a) Any planned development, as defined in Section 11003,
containing five or more lots.
(b) Any community apartment project, as defined by Section 11004,
containing five or more apartments.
(c) Any condominium project containing five or more condominiums,
as defined in Section 783 of the Civil Code.
(d) Any stock cooperative as defined in Section 11003.2, including
any legal or beneficial interests therein, having or intended to
have five or more shareholders.
(e) Any limited-equity housing cooperative, as defined in Section
11003.4.
(f) In addition, the following interests shall be subject to this
chapter and the regulations of the commissioner adopted pursuant
thereto:
(1) Any accompanying memberships or other rights or privileges
created in, or in connection with, any of the forms of development
referred to in subdivision (a), (b), (c), (d), or (e) by any deeds,
conveyances, leases, subleases, assignments, declarations of
restrictions, articles of incorporation, bylaws, or contracts
applicable thereto.
(2) Any interests or memberships in any owners' association as
defined in Section 1351 of the Civil Code, created in connection with
any of the forms of the development referred to in subdivision (a),
(b), (c), (d), or (e).
(g) Notwithstanding this section, time-share plans, exchange
programs, incidental benefits, and short-term product subject to
Chapter 2 (commencing with Section 11210) are not "subdivisions" or
"subdivided lands" subject to this chapter.

11007. Every nonresident subdivider shall file with the
questionnaire an irrevocable consent that if, in any action commenced
against him in this State, personal service of process upon him
cannot be made in this State after the exercise of due diligence, a
valid service may thereupon be made upon him by delivering the
process to the Secretary of State.
Insofar as possible, the provisions of Section 1018 of the Code of
Civil Procedure relating to the service of process on the Secretary
of State are applicable to this section.

11008. No provision of this part which makes a violation of this
part a crime shall be construed to preclude application of any other
criminal provision of the law of this state to an act or omission
which constitutes a violation of this part.