reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Suitability of the Participant › Section 260.140.112.3 - Presumptive Suitability Standards

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Investors shall have a minimum annual
						gross income of $30,000 and a net worth of $30,000 or, in the alternative, a
						minimum net worth of $75,000. For programs offering mandatory deferred payments
						on account of the purchase price of program interests, investors shall
						ordinarily have a minimum annual gross income of $60,000 and a net worth of
						$60,000 or, in the alternative, a net worth of $225,000. In high-risk or
						principally tax-oriented offerings, higher suitability standards may be
						required. In low-risk or non-tax-oriented offerings, lower suitability
						standards may be allowed.
(b) The
						Commissioner may approve any offering on a basis other than that permitted in
						these rules where the investor has a minimum net worth of up to $250,000 and
						had during the last tax year, or estimates that the investor will have during
						the current tax year, gross income of $65,000 or, in the alternative, a minimum
						net worth of up to $500,000. In the case of such offerings, the Commissioner
						may require a statement signed by the investor acknowledging the manner in
						which the program varies from these rules.
(c) Net worth shall be determined exclusive
						of home, home furnishings and automobiles. Assets included in the computation
						of net worth may be valued at fair market value.
(d) In the case of sales to fiduciary
						accounts, the suitability standards shall be met by each beneficiary of the
						account. Where the fiduciary is the donor of the funds for investment in the
						program the fiduciary may meet the suitability standards. If the only
						beneficiaries of the fiduciary account are the donor's ancestors, descendants
						or spouse, the suitability standards may be met by the donor to the
						account.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Renumbering and amendment of former section
						  260.140.112.2 to section
						  260.140.112.3 and renumbering of
						  former section
						  260.140.112.3 to section
						  260.140.112.4 filed 5-18-92;
						  operative 6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Suitability of the Participant › Section 260.140.112.4 - Maintenance of Records

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The sponsor shall maintain for at least 4 years a
						  record of the information obtained to determine that an investor meets the
						  suitability standards imposed on the offer and sale of program interests and a
						  representation of the investor that the investor is investing for the
						  investor's own account or, in lieu of such representation, information
						  indicating that the investor for whose account the investment was made met the
						  suitability standards. Where the offering is underwritten or sold by a
						  broker-dealer, the sponsor shall obtain a commitment from the broker-dealer to
						  maintain the same record of information required of the
						  sponsor.
1.
						  Repealer filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Renumbering of section
						  260.140.112.3 to section
						  260.140.112.4 filed 5-18-92;
						  operative 6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Suitability of the Participant › Section 260.140.112.5 - Presumptive Suitability Standards. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1.
						  Repealer filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.1 - Fees, Compensation and Expenses to be Reasonable

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The total amount of consideration of all
						kinds which may be paid directly or indirectly to all persons shall be
						reasonable.
(b) Except for the
						promotional interests and program management fees permitted by Sections
						260.140.113.5 and
						260.140.113.6 hereof, and subject
						to all other prohibitions and requirements contained in these Rules,
						consideration may only be paid for reasonable and necessary goods, property or
						services.
(c) The Prospectus must
						fully disclose and itemize all consideration which may be received from the
						program directly or indirectly by the sponsor, its affiliates and underwriters,
						what the consideration is for, and how and when it will be paid. This
						information shall be set forth in one location in tabular form.
1. New
						  section filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.2 - Organization and Offering Expenses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All organization and offering expenses incurred in
						  connection with the sale of program interests shall not exceed 15% of aggregate
						  capital contributions. The percentage limitation shall be applied only to the
						  portion of aggregate capital contributions when and as paid to the program. For
						  purposes of this Section, capital contributions shall include mandatory
						  deferred payments only as such amounts are paid to the
						  program.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
3. Editorial correction (Register 95, No.
						  48).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.3 - Compensation for Acquisition Services

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Payment of an acquisition fee shall be reasonable and
						  shall be payable only for services actually rendered and to be rendered
						  directly or indirectly and subject to the following conditions:
(a) The total of all such compensation paid
						to everyone involved in the transaction by the program and/or any other person
						shall be deemed to be presumptively reasonable if it does not exceed the lesser
						of such compensation customarily charged in arms' length transactions by others
						rendering similar services as an ongoing public activity in the same
						geographical location and for comparable property or an amount equal to 18% of
						the gross proceeds of the offering. The acquisition fee to be paid to the
						sponsor shall be reduced to the extent that other real estate commissions,
						acquisition fees, finder's fees, or other similar fees or commissions are paid
						by any person in connection with the transaction. For purposes of this Section,
						gross proceeds of the offering shall include mandatory deferred payments only
						as such amounts are paid to the program.
(b) The limitation imposed in paragraph (a)
						of this Rule shall be applied separately to each acquisition, with the 18%
						maximum percentage computed on that portion of the proceeds (adjusted to
						include a pro rata amount of any organization and offering expenses) applicable
						to the property which is the subject of the transaction.
Within 30 days after completion of the last
						  acquisition, the sponsor shall forward to the Commissioner a schedule, verified
						  under penalty of perjury, reflecting:
(1) each acquisition made;
(2) the purchase price paid (not including
						acquisition fees);
(3) the
						aggregate of all acquisition fees paid on each transaction; and,
(4) a computation showing compliance with
						this Rule.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.4 - Payment for Acquisition Expenses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Except as provided herein, payments by
						the program for acquisition expenses are subject to Section
						260.140.114.5.
(b) The sponsor may be reimbursed for the
						actual cost of acquisition expenses consisting of goods or services provided to
						the program by persons who are unaffiliated with the sponsor if the acquisition
						expenses were incurred by the sponsor prior to the time that the program had
						funds available to pay such expenses directly.
(c) Notwithstanding paragraph (b) of this
						Section, the program may not directly pay or reimburse the sponsor for
						acquisition expenses consisting of salaries, fringe benefits, miscellaneous
						expenses related to the evaluation, selection or acquisition of properties,
						unless such expenses reduce the acquisition fees permitted to be paid by
						Section 260.140.113.3.
1. New
						  section filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
2.
						  Renumbering of former section
						  260.140.113.4 to section
						  260.140.113.5 and new section
						  filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.5 - Promotional Interests and Program Management Fees

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An adequately subordinated interest in
						the program will be allowed as a promotional interest and program management
						fee, provided the amount or percentage of such interest is reasonable. Such
						interest will be considered adequately subordinated and presumptively
						reasonable if it is within the limitations expressed in either subparagraph
						below:
(1) An interest equal to 25% of
						distributions from any source remaining after payment to investors of an amount
						equal to 100% of capital contributions plus an amount equal to 6% of capital
						contributions per annum cumulative; or
(2) An interest equal to:
(A) 10% of distributions from cash available
						for distribution from operations; and
(B) 15% of distributions from cash available
						from sale and refinancing of properties remaining after payment to investors of
						an amount equal to 100% of capital contributions plus an amount equal to 6% of
						capital contributions per annum cumulative.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.6 - Other Program Management Fees

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) A general partner of a program owning
						unimproved land shall be entitled to annual compensation not exceeding ¼
						of 1% of the cost of such unimproved land for operating the program until such
						time as the land is sold or improvement of the land commences by the limited
						partnership. In no event shall this fee exceed a cumulative total of 2% of the
						original cost of the land regardless of the number of years held.
(b) A general partner of a program holding
						property in government subsidized projects shall be entitled to annual
						compensation not exceeding ½ of 1% of the cost of such property for
						operating the program until such time as the property is sold, provided the
						aggregate of all compensation received is consistent with the maximum allowed
						for nonsubsidized programs.
(c)
						Program management fees other than as set forth above shall be
						prohibited.
1.
						  Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No.
						  11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter
						  (Register 84, No. 4).
3. Renumbering of former section
						  260.140.113.6 to section
						  260.140.113.7 and renumbering of
						  former section
						  260.140.113.5 to section
						  260.140.113.6 filed 5-18-92;
						  operative 6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.7 - Real Estate Brokerage Commissions on Resale of Property

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The total compensation paid to all persons for the sale
						  of a program property shall be limited to a competitive real estate commission,
						  not to exceed 6% of the contract price for the sale of the property. If the
						  sponsor provides a substantial amount of the services in the sales effort, the
						  sponsor may receive up to one-half of the competitive real estate commission,
						  not to exceed 3%, and subordinated as in Section
						  260.140.113.5(a)
						  above. If the sponsor participates with an independent broker on resale, the
						  subordination requirement shall apply only to the commission earned by the
						  sponsor.
1.
						  Amendment filed 1-22-75; effective thirtieth day thereafter (Register 75, No.
						  4).
2. Amendment filed 1-27-84; effective thirtieth day thereafter
						  (Register 84, No. 4).
3. Renumbering and amendment of former section
						  260.140.113.6 to section
						  260.140.113.7 filed 5-18-92;
						  operative 6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.8 - Property Management Fee

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The sponsor may render property
						management services to the program provided such services are necessary to the
						prudent operation of the program and the sponsor maintains adequate staff to
						perform such services. Property management fees paid to the sponsor may not
						exceed the lesser of the fees set forth in subparagraphs (1) through (3) below
						or the fees which are competitive with amounts charged by unaffiliated parties
						for similar services in the same geographic location. Included in such fees
						shall be amounts paid for bookkeeping services and fees paid to persons
						unaffiliated with the sponsor for property management services.
(1) In the case of residential property, the
						maximum property management fee (including all rent-up, leasing, re-leasing
						fees and bonuses, and leasing related services, paid to any person) shall be 5%
						of the gross revenues from such property.
(2) In the case of industrial and commercial
						property, except as set forth in subparagraph (3) below, the maximum property
						management fee shall be 6% of the gross revenues from such leases where the
						sponsor performs leasing, re-leasing and leasing related services. The maximum
						property management fee from such leases shall be 3% of the gross revenues
						where the sponsor does not perform leasing, re-leasing, and leasing related
						services with respect to the property.
(3) In the case of industrial and commercial
						properties which are leased on a long term (ten or more years) net (or similar)
						basis, the maximum property management fee from such leases shall be 1% of the
						gross revenues, except for a one-time initial leasing fee of 3% of the gross
						revenues on each lease, which fee is payable over the first five full years of
						the original term of the lease.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.9 - Insurance Services

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The sponsor may provide insurance brokerage services in
						  connection with obtaining insurance on the program's property so long as the
						  cost of providing such service, including the cost of the insurance, is no
						  greater than the lowest quote obtained from two unaffiliated insurance agencies
						  and the coverage and terms are likewise comparable. In no event may such
						  services be provided by the sponsor unless they are independently engaged in
						  the business of providing such services to other than affiliates and at least
						  75% of their insurance brokerage service gross revenue is derived from other
						  than affiliates.
1. New
						  section filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Fees-Compensation-Expenses › Section 260.140.113.10 - Asset Based Fee

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						An asset based fee includes compensation to a sponsor computed in accordance
						with this section.
(b) A program
						may elect to compensate the sponsor according to the provisions of this section
						only if the program meets all of the following:
(1) The prospectus states that a primary
						investment objective of the program is to generate and to distribute to the
						participants the cash flow from the operation of the properties of the
						program.
(2) The anticipated life
						of the program does not exceed 20 years from the date the offering is declared
						effective by the Securities and Exchange Commission. However, the partnership
						agreement may provide that the program will be extended by the affirmative vote
						of a majority of the outstanding limited partnership interests.
(3) The program will invest not less than 82%
						of the capital contributions in the purchase, development construction or
						improvement of specific properties. The remaining capital contributions may be
						used to pay organization and offering expenses, acquisition expenses,
						acquisition fees, and any other related fees and expenses, provided such
						expenses and fees are reasonable in accordance with Sections
						260.140.113.1,
						260.140.113.2., 260.140.113.3. and
						260.140.113.4. The total amount of organization and offering expenses,
						acquisition expenses, acquisition fees, and any other related fees and
						expenses, whenever paid, shall be limited to the initial amount of capital
						contributions not applied to the purchase, construction or improvement of
						specific properties. Not more than 3% of the capital contributions invested in
						the purchase, development, construction, or improvement of specific properties
						may be included as a working capital reserve.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.2 - Exchange of Limited Partnership Interests

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Ordinarily, a program may not acquire property in
						  exchange for limited partnership interests. Such an exchange will be permitted
						  if the property and specific terms of the transaction are identified in the
						  prospectus and the property will be exchanged immediately upon effectiveness of
						  the qualification. In addition, such exchange shall meet the following
						  conditions:
(a) A provision for such
						exchange must be set forth in the partnership agreement, and appropriate
						disclosure as to tax effects of such exchange must be set forth in the
						prospectus;
(b) The property to be
						acquired must come within the objectives of the program;
(c) The purchase price assigned to the
						property shall be no higher than its appraised value;
(d) Each program interest must be valued at
						no less than market value if there is a market or if there is no market, at the
						fair market value of the program's assets as determined by an independent
						appraiser within the last 90 days, less its liabilities, divided by the number
						of program interests outstanding;
(e) No more than one-half of the interests
						issued by the program shall be issued in exchange for property;
(f) No securities sales or underwriting
						commissions shall be paid in connection with such exchange.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment and new subsections (a)-(f) filed 5-18-92;
						  operative 6-17-92 (Register 92, No. 22).
3. Editorial correction of
						  HISTORY 2 (Register 95, No. 12).
4. Change without regulatory effect
						  amending subsection (e) filed 9-25-2002 pursuant to section
						  100, title 1, California Code of
						  Regulations (Register 2002, No. 39).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.3 - Exclusive Agreement

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A program shall not give a sponsor an exclusive right
						  to sell or exclusive employment to sell property for the
						  program.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.4 - Commissions on Reinvestment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A program may pay a commission or fee to the sponsor in
						  connection with any reinvestment provided the sum of such commission or fee and
						  the acquisition fee received on the initial acquisition together do not exceed
						  the limitations of Section
						  260.140.113.3 had the initial and
						  subsequent purchase occurred simultaneously on a combined leverage basis not
						  exceeding 80% of the purchase price of the properties.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment of section and heading filed 5-18-92; operative
						  6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.5 - Program Expenses and Other Goods and Services Provided by the Sponsor

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) All expenses of
						the program shall be billed directly to and paid by the program. Reimbursements
						to the sponsor may be permitted for the following:
(1) Organization and offering expenses
						subject to Section
						260.140.113.2.
(2) Acquisition expenses subject to Section
						260.140.113.4.
(3) The actual cost of goods and materials
						used for or by the program and obtained from unaffiliated persons.
(4) Administrative and transfer agency type
						services provided by the sponsor, such as legal, accounting, and investor
						communications services, which meet the following conditions:
(A) The sponsor undertakes to maintain an
						adequate staff to perform such services;
(B) Such services are necessary to the
						prudent operations of the program; and
(C) The price paid to the sponsor for such
						services does not exceed the lesser of the actual cost of such services to the
						sponsor or 90% of the competitive rate charged by unaffiliated persons
						rendering similar services in the same geographic location.
(5) The actual cost of on site property
						management personnel if such amounts are customarily reimbursed for similar
						property in the same geographical location in addition to payment of the
						property management fee permitted by Section
						260.140.113.8 of these Rules and
						the sponsor is compensated for property management services pursuant to that
						Section. Such reimbursements may not exceed a competitive rate for comparable
						services for similar property in the same geographic
						location.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.6 - Development or Construction Contracts

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The sponsor will not be permitted to construct or
						  develop properties, or render any services in connection with such development
						  or construction, unless all of the following conditions are satisfied:
(a) The transactions occur at the formation
						of the program.
(b) The specific
						terms of the development and construction of identifiable properties are
						ascertainable and fully disclosed in the prospectus.
(c) The purchase price to be paid by the
						program is based upon a firm contract price which in no event can exceed the
						sum of the cost of the land and the sponsor's cost of construction. For
						purposes of this subdivision, cost of construction includes the contractor or
						construction fee customarily paid for services as a general contractor,
						provided, however, that any overhead of the general contractor is not charged
						to the program or included in the cost of construction.
(d) In the case of construction, the only
						fees paid to the sponsor in connection with such project, other than a
						development fee, shall consist of a construction fee for acting as a general
						contractor, which fees must be comparable and competitive with the fee of
						unaffiliated persons rendering comparable services (excluding, however, any
						overhead of the contractor), and a real estate commission in connection with
						the acquisition of the land, if appropriate under the circumstances. Any such
						real estate commission shall be subject to the provisions of Section
						260.140.113.3 of these
						Rules.
(e) In the case of both
						development and construction fees paid to the sponsor, the sponsor must comply
						with paragraphs (d)(2) and (3) of Section
						260.140.114.5.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment of subsections (d) and (e) filed 5-18-92; operative
						  6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.7 - Rebates, Kickbacks and Reciprocal Arrangements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) No rebates or give-ups may be received by
						the sponsor nor may the sponsor participate in any reciprocal business
						arrangements which would circumvent these Rules. Furthermore the prospectus and
						program agreement shall contain language prohibiting the above as well as
						language prohibiting reciprocal business arrangements which would circumvent
						the restrictions against dealing with the general partners or
						affiliates.
(b) No sponsor,
						underwriter, dealer or salesman of program interests shall directly or
						indirectly pay or award any finder's fees, commissions or other compensation to
						any person engaged by a potential investor for investment advice as an
						inducement to such advisor to advise the purchase of interests in the program;
						provided, however, that this clause shall not prohibit the normal sales
						commissions payable to a registered broker-dealer or other properly licensed
						person for selling program interests.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.8 - Commingling of Funds

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The funds of a program shall not be commingled with the
						  funds of any other person. Nothing contained in this Rule shall prohibit a
						  sponsor from establishing a master fiduciary account pursuant to which separate
						  subtrust accounts are established for the benefit of affiliated limited
						  partnerships, provided that program funds are protected from claims of such
						  other partnerships and/or creditors. The prohibition of this Rule shall not
						  apply to investments meeting the requirements of Section
						  260.140.114.9.
1.
						  Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No.
						  11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter
						  (Register 84, No. 4).
3. Amendment filed 5-18-92; operative 6-17-92
						  (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.9 - Investments in or With Other Programs

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The program shall be permitted to invest
						in general partnerships or joint ventures with non-affiliates that own and
						operate one or more particular properties if the program, alone or together
						with any publicly registered affiliate of the program meeting the requirements
						of paragraph (b) of this Section, acquires a controlling interest in such a
						general partnership or joint venture, but in no event shall duplicate fees be
						permitted. For purposes of this Section, "controlling interest" means an equity
						interest possessing the power to direct or cause the direction of the
						management and policies of the general partnership or joint venture, including
						the authority to:
(1) Review all contracts
						entered into by the general partnership or joint venture that will have a
						material effect on its business or property;
(2) Cause a sale or refinancing of the
						property or its interest therein subject in certain cases where required by the
						partnership or joint venture agreement, to limits as to time, minimum amounts
						and/or right of first refusal by the joint venture partner or consent of the
						joint venture partner;
(3) Approve
						budgets and major capital expenditures, subject to a stated minimum
						amount;
(4) Veto any sale or
						refinancing of the property, or, alternatively, to receive a specified
						preference on sale or refinancing proceeds; and
(5) Exercise a right of first refusal on any
						desired sale or refinancing by the joint venture partner of its interest in the
						property except for transfer to an affiliate of the joint venture
						partner.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.10 - Lending Practices

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						On financing made available to the program by the sponsor, the sponsor may not
						receive interest and other financing charges or fees in excess of the amounts
						which would be charged by unrelated lending institutions on comparable loans
						for the same purpose in the same locality of the property. No prepayment charge
						or penalty shall be required by the sponsor on a loan to the program secured by
						either a first or a junior or all-inclusive trust deed, mortgage or encumbrance
						on the property, except to the extent that such prepayment charge or penalty is
						attributable to the underlying encumbrance. Except as permitted by subsection
						(b) of this section, the sponsor shall be prohibited from providing permanent
						financing for the program.
(b) The
						sponsor may provide permanent financing for the purchase of property by the
						program through use of an "all-inclusive" or "wrap around" note provided all of
						the following conditions are complied with:
(1) The sponsor under the all-inclusive note
						shall not receive interest on the amount of the underlying encumbrance included
						in the all-inclusive note in excess of that payable to the lender on that
						underlying encumbrance;
(2) The
						program shall receive credit on its obligation under the all-inclusive note for
						payments made directly on the underlying encumbrance, and
(3) A paying agent, ordinarily a bank, escrow
						company, or savings and loan, shall collect payments (other than any initial
						payment of prepaid interest or loan points not to be applied to the underlying
						encumbrance) on the all-inclusive note and make disbursements therefrom to the
						holder of the underlying encumbrance prior to making any disbursement to the
						holder of the all-inclusive note, subject to the requirements of subparagraph
						(1) above, or, in the alternative, all payments on the all-inclusive and
						underlying note shall be made directly by the program.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.11 - Completion Bond Requirement

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The completion of property acquired by
						the program which is under construction shall be guaranteed at the price
						contracted by an adequate completion bond or other satisfactory
						arrangements.
(b) For purposes of
						this section, satisfactory arrangements include, but are not limited to, the
						following:
(1) A written guarantee of
						completion by a person, supported by financial statements demonstrating
						sufficient net worth or adequately collateralized by real or personal
						properties or other personal guarantees.
(2) A retention of a reasonable portion of
						the purchase consideration as a potential offset to such purchase consideration
						in the event the seller does not perform in accordance with the purchase and
						sale agreement.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.12 - Requirement for Real Property Appraisal

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All real property acquisitions must be supported by an
						  appraisal. Any appraisal obtained, whether or not required by these Rules,
						  shall be maintained in the sponsor's records for at least 5
						  years.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.13 - Financing Policies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						All mortgage financing obtained by the program or retained upon acquired
						properties must provide for one of the following:
(1) Equal periodic payments (except for
						differences attributable to adjustable rate loans) on a schedule that would be
						sufficient to fully amortize the loan over a 20 to 40 year period;
(2) Payments of interest only for a period
						not greater than ten (10) years with the remaining balance payable in equal
						periodic payments on a schedule that would fully amortize the loan over a 20 to
						30 year period;
(3) Payments of a
						portion of stated interest currently and deferral of the remaining interest for
						a period not greater than five (5) years, with the remaining principal and
						interest payable in equal periodic payments on a schedule that would fully
						amortize the loan over a 20 to 35 year period, provided that the amount of
						deferred interest must be included in calculating the 25% exception referred to
						in paragraph (c)(1) of this Section.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Conflicts of Interest and Investment Restrictions › Section 260.140.114.14 - Program Indebtedness

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Following termination of the offering,
						total indebtedness incurred by the program shall at no time exceed the sum of
						80% of the aggregate purchase price of properties that have not been
						refinanced, and 80% of the aggregate fair market value of all refinanced
						properties, as determined by the lender as of the date of
						refinancing.
(b) For purposes of
						this Section only, "indebtedness" shall include the principal of any loan
						together with any interest that may be deferred pursuant to the terms of the
						loan agreement which exceeds 5% per annum of the principal balance of such
						indebtedness (excluding contingent participations in income and/or appreciation
						in the value of the program property); and shall exclude any indebtedness
						incurred by the program for necessary working capital.
1. New
						  section filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
2.
						  Editorial correction moving "Non-specified property programs" subheading to
						  section 260.140.115.1 and amendment of
						  HISTORY 1. (Register 92, No. 34).
Note: Authority cited: Section
							 25610, Corporation Code.
							 Reference: Section
							 25140, Corporation
							 Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Non-Specified Property Programs › Section 260.140.115.1 - Minimum Capitalization

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A non-specified property program shall provide for
						  minimum gross proceeds from the offering of not less than $1,000,000 after
						  payment of all organizational and offering expenses before it may commence
						  business.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
3. Editorial correction inserting "Non-specified property
						  programs" subheading (Register 92, No. 34).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Non-Specified Property Programs › Section 260.140.115.2 - Experience of Sponsor

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In addition to the experience requirements stated in
						  Section 260.140.111.1, a general partner,
						  or if a general partner is not an individual, the operating officer of such
						  general partner, must have had the equivalent of at least 5 years experience in
						  the real estate business in an executive capacity.
Such persons must also have two years experience in the
						  management and acquisition of the type of properties to be acquired or
						  otherwise must demonstrate to the satisfaction of the Commissioner that they
						  have sufficient knowledge and experience to acquire and manage the type of
						  properties proposed to be acquired by the non-specified property
						  program.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment filed 5-18-92; operative 6-17-92 (Register 92, No.
						  22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Non-Specified Property Programs › Section 260.140.115.3 - Investment Restrictions and Objectives

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Unimproved or non-income producing
						property shall not be acquired except upon terms which can be financed by the
						program proceeds or from cash available for distribution from operations.
						Investments in such property shall not exceed 25% of the gross proceeds of the
						offering. Properties which are expected to produce income within a reasonable
						period of time shall not be considered non-income producing. For purposes of
						this paragraph two years shall be deemed to be presumptively
						reasonable.
(b) Investments in
						junior trust deeds, and other similar obligations shall be prohibited, except
						for junior trust deeds which arise from the sale of program
						properties.
(c) The manner in which
						acquisitions will be financed, including the use of an all-inclusive note or
						wrap-around mortgage, and the amount of leverage to be employed shall be fully
						set forth in the statement of investment objectives.
(d) The prospectus shall disclose whether the
						program will enter into joint venture arrangements and the projected extent
						thereof.
1.
						  Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
						  4).
2. Amendment of section heading and subsection (a), repealer of
						  subsection (c), and new subsections (c) and (d) filed 5-18-92; operative
						  6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.