A program administrator shall not submit, present, or otherwise approve for recordation by a public agency an assessment contract unless the following criteria are satisfied:
(a) All property taxes for the property that will be subject to the assessment contract are current. The program administrator shall ask a property owner whether there has been no more than one late payment of property taxes on the property for the previous three years or since the current owner acquired the property, whichever period is shorter.
(b) The property that will be subject to the assessment contract has no recorded and outstanding involuntary liens in excess of one thousand dollars ($1,000).
(c) The property that will be subject to the assessment contract has no notices of default currently recorded which have not been rescinded.
(d) The property owner has not been a party to any bankruptcy proceedings within the last seven years, except that the property owner may have been party to a bankruptcy proceeding that was discharged or dismissed between two and seven years before the application date and the property owner has had no payments more than 30 days past due on any mortgage debt or nonmortgage debt, excluding medical debt, during the 12 months immediately preceding the application date.
(e) The property owner is current on all mortgage debt on the subject property and has no more than one late payment during the 12 months immediately preceding the application date and if the late payment did not exceed 30 days past due.
(f) The property that will be subject to the assessment contract is within the geographical boundaries of the applicable PACE program.
(g) The measures to be installed pursuant to the assessment contract are eligible under the terms of the applicable PACE program.
(h) The financing is for less than 15 percent of the value of the property, up to the first seven hundred thousand dollars ($700,000) inclusive of the existing assessments, and is for less than 10 percent of the remaining value of the property above seven hundred thousand dollars ($700,000).
(i) The total PACE assessments and the mortgage-related debt on the property subject to the PACE assessment will not exceed 97 percent of the market value of the property as established by the valuation required by Section 22685.
(j) The term of the assessment contract shall not exceed the estimated useful life of the measure to which the greatest portion of funds disbursed under the assessment contract is attributable. The program administrator shall determine useful life for purposes of this subdivision based upon credible third-party standards or certification criteria that have been established by appropriate government agencies or nationally recognized standards and testing organizations.
(k) The program administrator shall verify the existence of recorded PACE assessments and shall ask if the property owner has authorized additional PACE assessments on the same subject property that have not yet been recorded. The failure of a property owner to comply with this subdivision shall not invalidate an assessment contract or any obligations thereunder, notwithstanding where the combined amount of the PACE assessments exceed the criteria set forth in subdivision (h) or (i). The existence of a prior PACE assessment or a prior assessment contract shall not constitute evidence that the assessment contract under consideration is affordable or meets any other program requirements.
(l) The program administrator shall use commercially reasonable and available methods to verify the above.
(m) Notwithstanding Section 22696, this section shall become operative on January 1, 2018.
(Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative January 1, 2018, by its own provisions.)
Last modified: October 25, 2018