The Subdivision Public Report is a
disclosure statement for the public which permits the sale or lease of
lots, parcels or units within a subdivision. Just as corporations must
obtain approval to issue and sell stock certificates, a developer must
obtain approval to sell or lease five or more lots, parcels or units
within a subdivision.
Any person or persons who intend on selling or leasing five or more
lots, parcels, or units within a subdivision must first obtain a
Subdivision Public Report.
Types of subdivision projects that are exempt from obtaining a
Public Reports are;
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Those subdivisions with less than five units.
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Subdivisions offered by public agencies.
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Commercial and industrial subdivisions.
A standard subdivision (having no common area) within the
boundaries of a city with all lots to be improved.
The Subdivision Public Report, also called a White Report or Final
Subdivision Public Report, authorizes a developer to sell or lease lots,
parcels or units within a subdivision. On some occasions a developer may
apply for a Preliminary Public Report, also known as a Pink Report,
which will allow a developer to advertise and take reservation deposit
monies for the sale or lease of lots, parcels or units within
subdivision. Reservation deposits taken by a developer under a
Preliminary Subdivision Public Report are fully refundable.
The Department of Real Estate guidelines are specific about certain
conditions that should always be included in the Public Report.
Generally, the Public Report will disclose such information as:
applicant's name, location and size of the subdivision, information on
utilities, schools, taxes, management, maintenance and operational
expenses, unusual
easements, rights of way, set back requirements on vacant land
offerings, restrictions or conditions imposed upon the buyer, any
unusual costs that a consumer might have to incur and any unusual
financial or conveyance arrangements. Each Public Report is unique to
its specific project. The information found within the pages is provided
to assist the potential purchaser with making an informed decision.
The purpose of the Subdivision Public Report is to inform the consumer
about a specific property/project, thereby offering some protection from
misrepresentation, deceit and fraud. During the processing of the
Subdivision Public Report, the California Department of Real Estate,
among other things, reviews the developer's project management budget,
deposit money handling, advertisements and the guarantees made to
complete all promised improvements.
The Commissioner of the Department of Real Estate is responsible for
policing compliance of the Subdivision Public Report. Whenever the
Commissioner believes from satisfactory evidence that any person has or
is about to violate any provisions, conditions, or requirements of the
Subdivision Public Report, the Commissioner may bring an action in the
Superior Court against such person, in the name of the People of the
State of California.
The Subdivision Public Report gives a potential home buyer pertinent
information regarding the subdivision he/she is buying into. Although
the Public Report is neither an offer nor a recommendation to purchase,
it is an invaluable source of information for the consumer. Also
important is the disclosure portion of the Public Report which serves to
alert consumers to any negative aspects of a particular offering.
Under the California Business and Transportation Agency is the
Department of Real Estate, whose Chief Officer is the Real Estate
Commissioner. It is the Real Estate Commissioner's duties, through the
Department of Real Estate, to issue the Subdivision Public Reports,
license real estate brokers and sales persons, and adopt rules and
regulations for the enforcement of the California laws dealing with the
real estate industry.
The Department of Real Estate has established stringent guidelines and
standards with which developers must comply when structuring their
projects. All aspects of the subdivision offering are subjected to these
guidelines and standards in order to protect the public from
misrepresentation, deceit and fraud.
Source:
California DRE "Subdivision Public Report Application Guide" |