In September, a revised RE 618H form was published by the DRE. This revision allows for budget assessment changes in the Public Report. With the new process, we simply need to file an amendment application and $600 fee, then the DRE will approve use of the RE 618H form to be used with the existing report. The result is that our clients can then continue to open escrows without waiting for the b...
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By in Budgeting, DRE, Home Building, Regulations, Timeline

With the new solar requirements coming into effect in 2020, we have confirmed that the DRE will maintain their “hands off” approach to reviewing solar (lease/sale) documents. That is, unless the Subdivider is a party or related subsidiary to the solar installer. In that case, the DRE will want to review every document, to ensure that consumer protection mechanisms are in place. The movement fro...
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By in Budgeting, DRE, Home Building, Regulations

You have a new project and you’re ready to get going! You’re just not sure the best course of action to take? Many questions may be crossing your mind, such as, “How many phases should there be?” or “How much money is this going to cost me?” No worries! We’ll help you put the best foot forward with our “Phasing Predictor”. The Phasing Predictor will assist you in creating a marketing phasing pr...
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By in Budgeting, DRE, Home Building, Phasing Predictor, Timeline

As you all know, when you have a project with an existing Deed of Trust, the Department of Real Estate requires that the existing loan be made subordinate to the CC&Rs.  This is accomplished through recording a “Subordination” or “Consent of the Lien Holder”, which effectively allows the CC&RS to “jump ahead” of the CC&Rs in priority of title. Do you know why the DRE requires this a...
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By in DRE, HOAs, Home Building, Regulations

The construction loan is recorded and construction is well underway. The DRE process is clicking along, and you just found out you need to negotiate with the Lender... Again. In an effort to fulfill their mission of consumer protection, the Department of Real Estate requires that certain documents be protected against any possibility of a loan foreclosure. In other words, certain documents that...
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By in DRE, Home Building, Regulations
Plans

As HOA Start-up Budgets are being created, a question we hear often is "can the dues be reduced?" More often than not, the HOA dues in the early phases are higher simply because of the way the development has been mapped. One big item that impacts the HOA dues in the early phases is quite simply that the common area lots are too large.  Unfortunately, this is something that should be addressed ...
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By in Budgeting, DRE, HOAs
Do's and don'ts

One question we are asked from time to time, is whether or not a client should record CC&Rs  (Covenants, Conditions & Restrictions) on their project.  The answer is often also a question:  Does the local agency require that CC&Rs be recorded?  Depending upon the type of community being created, it may be that no CC&Rs are required at all. The Department of Real Estate’s Glossary...
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By in Budgeting, DRE, HOAs
Available Sign

The Department of Real Estate oversees the marketing and sales of subdivided lands, which is generally defined as developments consisting of five (5) or more lots or units, for sale to members of the public.  With their mission to provide consumer protection to California homebuyers, the DRE review investigates subdivision offerings to prevent fraud and misrepresentation in subdivision sales. D...
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By in DRE, Home Building, Processing
Bulk photo

The success of the Costco chain of stores has proven that buying in bulk makes sense to a lot of us. From retail sales to real estate, the bulk purchase concept is logically sound. Builders who negotiate a purchase of all or a portion of a subdivision may find that the bulk sale is beneficial, allowing for a better purchase price, among other things. We see these types of transactions more and ...
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By in DRE, Home Building
scissors photo

When an HOA is created, the assessments are triggered when the first lot or unit is sold.  For planning purposes, it’s important to note that the DRE Regulations allow for HOA assessments to be waived for HOA-maintained improvements that are not complete. In a nutshell, Regulation 2792.16c stipulates that any assessments for costs or expenses for common area which has not been completed can be def...
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By in DRE, Regulations