Notwithstanding Sections 11013.1 and 11013.2, an individual interest in a stock cooperative, as defined in Section 4190 of the Civil Code, or a limited equity housing cooperative, as defined in Section 817 of the Civil Code, may be sold or leased subject to a blanket encumbrance if all of the following conditions are met:
(a) The notice required pursuant to Section 1133 of the Civil Code is provided to each prospective purchaser and lessee of the interest and is included in every purchase and lease contract.
(b) The property subject to the sale or lease has obtained a public report from the Bureau of Real Estate that accounts for the blanket encumbrance.
(c) The governing documents for the association require the association to create and maintain during the term of the blanket encumbrance all of the following:
(1) Prior to the sale of any individual interests in the stock cooperative or limited-equity housing cooperative, a financing reserve amount equal to at least two months of the amount of the debt service payments due on the blanket encumbrance.
(2) Within one year of the sale of at least 25 percent of the individual interests in the stock cooperative or limited-equity housing cooperative, a financing reserve amount equal to at least three months of the amount of the debt service payments due on the blanket encumbrance.
(3) Within one year of the sale of at least 50 percent of the individual interests in the stock cooperative or limited-equity housing cooperative, a financing reserve amount equal to at least five months of the amount of the debt service payments due on the blanket encumbrance.
(4) Within one year of the sale of at least 75 percent of the individual interests in the stock cooperative or limited-equity housing cooperative, a financing reserve amount equal to at least eight months of the amount of the debt service payments due on the blanket encumbrance.
(Added by Stats. 2014, Ch. 661, Sec. 3. (AB 569) Effective January 1, 2015.)
Last modified: October 25, 2018