SR-406-001 (17)
F:\ATTY\MUNI\STRPTS\MJM\realestatetransferdisclosure.doc
City Council Meeting 12-9-03 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Ordinance Adding Chapter 9.60 to the Santa Monica Municipal Code to
Require Owners or Selling Agents of Real Property to Disclose When the
Property is Designated as a Historic Resource or Listed on the City’s
Inventory of Historic Resources
Introduction
The Council has directed staff to prepare an ordinance which would require agents
selling real property to disclose the historic status of a structure to potential buyers. The
attached proposed ordinance fulfills that request and is presented to the Council for first
reading.
Background
In September of 2002, the City adopted a Historic Preservation Element to establish its
long-range vision for the protection of the City’s historic resources and to establish
implementation strategies for achieving that vision. Policy 3.4.2 of the Element provides
that the City should notify real estate firms of listings of historic or potentially historic
landmarks. The City Planning Division has provided information to the real estate
community that has increased awareness of the City’s preservation program and
encouraged voluntary disclosure. However, voluntary measures have not been
sufficient to ensure implementation of this policy. Indeed, there have been some
instances in which homeowners appeared before Council and gave testimony which
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indicated that they were not notified of the historic status of their homes prior to
purchase. Moreover, the preservationist community has given testimony indicating that
a disclosure ordinance would help protect the City’s historic resources. Thus, the
Council directed staff to prepare an ordinance both for the protection of potential buyers
and in order to effectuate the City’s preservation policy.
Discussion
The attached proposed ordinance would require the owner or selling agent of any real
property to provide the buyer with notice of whether the property has been designated
as a landmark, structure of merit or contributor to an historic district and with notice of
whether the property has been identified in the Historic Resources Inventory. This
disclosure would have to be made as soon as practicable prior to the transfer of title.
The law would also require the buyer to execute an acknowledgement of receipt of the
disclosure. The acknowledgement of receipt would be filed with the City Clerk.
This proposal is patterned after agent/owner disclosure requirements of state law,
although state law, in some instances, more narrowly defines the range of properties
subject to disclosure requirements. Specifically, the proposed ordinance would apply to
commercial and residential property. Many state disclosure requirements apply only to
smaller residential properties.
Financial/Budget Impact
There would be a minimal cost to the office of the City Clerk attendant upon maintaining
the acknowledgement documents.
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Recommendation
It is respectfully recommended that the accompanying ordinance be introduced for first
reading.
PREPARED BY: Marsha Jones Moutrie, City Attorney
Barry Rosenbaum, Senior Land Use Attorney
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f:\atty\muni\laws\barry\realestatetransferdisclosure-1.wpd
Council Meeting 12-9-03 Santa Monica, California
ORDINANCE NUMBER ____ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA
MONICA ADDING CHAPTER 9.60 TO THE SANTA MONICA MUNICIPAL CODE
TO REQUIRE OWNERS OR SELLING AGENTS OF REAL PROPERTY TO
DISCLOSE WHEN THE PROPERTY IS DESIGNATED AS A HISTORIC RESOURCE
OR LISTED ON THE CITY’S INVENTORY OF HISTORIC RESOURCES
WHEREAS, the City of Santa Monica has a strong and long-standing
commitment to historic preservation; and,
WHEREAS, preservation of historic buildings enhances the quality of life in the
City, protects the aesthetics and charm of the physical environment, encourages
respect and appreciation for the community’s history and culture, safeguards the
character of the City, and contributes to the City’s economic stability; and
WHEREAS, the City adopted the Landmarks and Historic District Ordinance on
March 24, 1976 to effectuate its policy favoring historic preservation; and
WHEREAS, the Landmarks Ordinance established a Landmarks Commission
with powers including designating Structures of Merit and Landmarks and
recommending the designation of Historic Districts to the City Council; and
WHEREAS, in 1992, the City became a “Certified Local Government” (CLG)
under the National Historic Preservation Act; and
WHEREAS, to be certified, a local governmental program must enforce
appropriate State and local preservation legislation, establish and maintain a qualified
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historic preservation review commission, provide for adequate public participation in its
activities, perform other functions delegated to it by the State Historic Preservation
Officer (SHPO) under the National Historic Preservation Act, and maintain a system for
the survey and inventory of historic properties, consistent with guidelines provided by
SHPO; and
WHEREAS, since the adoption of the Landmarks Ordinance, the City has
undertaken three major historic resources surveys and three survey updates; and
WHEREAS, these surveys and updates identify, evaluate and document
potential architectural and historical resources located within the City; and
WHEREAS, in September 2002, the City adopted a Historic Preservation
Element to establish a long-range vision for the protection of historic resources in the
City and to provide implementation strategies to achieve that vision; and
WHEREAS, Policy 3.4.2 of this Element provides that the City should notify real
estate firms of listings of historic or potentially historic landmarks; and
WHEREAS, real estate brokers or agents representing the sellers of real
property have the obligation to disclose material facts about the property to prospective
purchasers under specified circumstances; and
WHEREAS, purchasers of historic and potentially historic properties are often
unaware of the historic status of the property and the potential development restrictions
that accompany this status as well as the benefits of owning, rehabilitating and
preserving historic property; and
WHEREAS, the notification requirements of this ordinance will ensure that
prospective purchasers will be informed of properties’ historic status and of the
regulations attendant upon that status; and
WHEREAS, these notification requirements will protect prospective purchasers
and will promote the general welfare by effectuating the City’s preservation policy,
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
HEREBY ORDAINS AS FOLLOWS:
SECTION 1. Chapter 9.60 hereby added to the Santa Monica Municipal Code to
read as follows:
Chapter 9.60
HISTORIC RESOURCE DISCLOSURE
Section 9.60.010.Definitions
.
(a) “Buyer” shall mean a transferee in a real property transaction,
and includes a person who executes an offer to purchase real property
from a seller through an agent, or who seeks the services of an agent with
the object of entering into a real property transaction. “Buyer” includes
vendee or lessee.
(b) “Offer to purchase” shall mean a written contract executed by a
buyer acting through a selling agent which becomes the contract for the
sale of the real property upon acceptance by the seller.
(c) “Owner” shall mean any person, copartnership, association,
corporation or fiduciary having legal or equitable title or any interest in real
property.
(d) “Real Property Transaction” shall mean a transaction for the
sale of real property in which an agent is employed by one or more of the
principals to act in that transaction, and includes a listing or an offer to
purchase.
(e) “Sale” shall mean a transaction for the transfer of real property
from the seller to the buyer and includes exchanges of real property
between the seller and buyer, transactions for the creation of a real
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property sales contract within the meaning of California Civil Code Section
2985, and transactions for the creation of a leasehold exceeding one
year’s duration.
(f) “Selling Agent” shall mean a listing agent who acts alone, or an
agent who acts in cooperation with a listing agent, and who sells or finds
and obtains a buyer for the real property, or an agent who locates property
for a buyer or who finds a buyer for a property for which no listing exists
and presents an offer to purchase to the seller.
Section 9.60.020.Disclosure of Historic Resources
If real property has been designated by the City of Santa Monica as
a landmark, structure of merit, or a contributor to a historic district, or has
been identified in the City’s Historic Resource Inventory or any update
thereto, the owner or the selling agent of the real property shall, in any
real property transaction, provide the buyer of the real property with notice
informing the buyer of the property’s historic status. The owner or the
selling agent shall provide the notice to the buyer as soon as practicable
before transfer of title. The buyer shall execute a receipt therefor as
furnished by the City and said receipt shall be delivered to the City Clerk
as evidence of compliance with the provisions of this Chapter.
Section 9.60.030. Remedies.
If any disclosure required to be made by this Chapter is delivered
after the execution of an offer to purchase, the buyer shall have three days
after delivery in person or five days after delivery by deposit in the mail to
terminate his or her offer by delivery of a written notice of termination to
the owner or selling agent. Any person who violates the provisions of this
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Chapter shall be subject to the penalties and remedies specified in
Chapter 1.08 of this Code. In addition, a buyer who does not receive the
notice required by Section 9.60.020 may bring a civil action for damages.
SECTION 2. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent necessary
to affect the provisions of this Ordinance.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional without regard to whether any portion
of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the
official
newspaper within 15 days after its adoption. This Ordinance shall become effective 30
days from its adoption.
APPROVED AS TO FORM:
____________________________
MARSHA JONES MOUTRIE
City Attorney
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