SUBDIVISIONS
Every broker and salesperson and prospective licensee should be familiar with the extent and purpose of the Commissioner’s jurisdiction over the sale or lease of newly subdivided land. Sooner or later the majority of active licensees are associated with the sale of subdivided property or are called on for advice in preparing a subdivision for market.
Sometimes a broker will find that a principal is creating a subdivision without realizing it. The broker should be equipped to protect the principal from violating the law.
When selling subdivided property, the broker must make certain that these important requirements of the subdivision law are observed:
1. Broker must furnish the prospective buyer with a copy of the subdivision public report, obtain a receipt, and give the prospective buyer an opportunity to read the report before the prospect makes an offer to purchase.
2. Broker must handle the deposit or purchase money in accordance with the law.
3. Broker must make a copy of each of the following documents available for examination by a prospective purchaser or lessee before the execution of an offer to purchase or lease and must give a copy thereof to each purchaser or lessee as soon as practicable before transfer of the interest being acquired by the purchaser or lessee:
a) The declaration of covenants, conditions, and restrictions for the subdivision.
b) Articles of incorporation or association for the subdivision owners association.
c) Bylaws for the subdivision owners association.
d) Any other instrument which establishes or defines the common, mutual, and reciprocal rights, and responsibilities of the owners or lessees of interests in the subdivision as shareholders or members of the subdivision owners association or otherwise.
e) To the extent available, the current financial information and related statements as specified in subdivision (a) of Section 1365 of the Civil Code, for subdivisions subject to those provisions.
f) A statement prepared by the governing body of the association setting forth the outstanding delinquent assessments and related charges levied by the association against the subdivision interests in question under authority of the governing instruments for the subdivision and association.