Understanding Subdivision Public Reports
Title Consumer Series
What is a Subdivision Final Public Report?
The Subdivision Final Public Report ("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.
Who must obtain a Department of Consumer Affairs Bureau of Real Estate ("CalBRE")?
Any person or persons who intend on selling or leasing five or more lots, parcels, or units within a subdivision must first obtain a Public Report.
What types of subdivision projects would be exempt from obtaining a Public Report?
- Those subdivisions with less than five units
- Subdivisions offered by public agencies
- Commercial and industrial subdivisions
- A standard subdivision (having no common area) within the boundaries of a city with all lots to be improved
- For specific examples and explanations regarding exempt status, contact CalBRE directly (www.dre.ca.gov).
Is there more than one type of Public Report?
The Public Report, also called a White 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 Public Report are fully refundable. A Subdivider may also obtain a Conditional Public Report, also called a Yellow Report, in order to enter into a binding contract with a buyer and open escrow prior to the issuance of the final public report, subject to the completion of specified conditions.
What kind of information can typically be found in the Public Report?
CalBRE 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.
What is the purpose of the Public Report?
The purpose of the 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 Public Report, CalBRE, among other things, reviews the developer's project management budget, deposit money handling, advertisements and the guarantees made to complete all promised improvements.
What State of California agency is responsible for policing compliance with Public Reports?
The Real Estate Commissioner of CalBRE is responsible for policing compliance of the Public Report. Whenever the Real Estate Commissioner believes from satisfactory evidence that any person has or is about to violate any provisions, conditions, or requirements of the 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.
Why is the CalBRE Public Report important to a new home buyer?
The 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.
What California State Agency is responsible for issuing the Public Report?
Under the Department of Consumer Affairs is CalBRE, whose Chief Officer is the Real Estate Commissioner. It is the Real Estate Commissioner's duties, through CalBRE, to issue the 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.
How does CalBRE protect the subdivision purchaser?
CalBRE 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.
This Title Consumer is published by the California Land Title Association. Member companies of the California Land Title Association are dedicated to facilitating the transfer of real property throughout California and increasing the public's awareness of the value and purpose of title insurance.
© California Land Title Association (Updated: October 2017)