Los Angeles Loan Modification Blog   Business & Real Estate News LOS ANGELES CITY COUNCIL PASSES ANTI-MANSIONIZATION ORDINANCE The Los Angeles City Council unanimously approved an ordinance on May 06, 2008 that limits the building of over-sized McMansions on small lots throughout the city. The result is a fundamental change in the city of Los Angeles zoning code. Changes in land value, housing preferences and housing inventory have been contributing to a trend toward larger single family homes being constructed throughout Los Angeles. When larger homes replace bungalows built when Los Angeles was first developed, however, the larger structures are often incompatible with the established scale and character of older, single-family neighborhoods. The Baseline Mansionization Ordinance grew out of a motion introduced by Councilmember LaBonge in June, 2006 and pertains to homes in flatlands only. A separate ordinance, which is now under consideration by the Los Angeles Planning Department, addresses the expansion of homes in hillside and coastal areas. As part of the discussion leading up to the vote on this measure, the City Council pledged to bring the hillside antimansionization ordinance for a vote within two years. Under the new ordinance, which will be effective in 30 days, a bungalow on a typical 5,000-square-foot lot could be expanded to 3,000 square feet. Current zoning code allows more than twice that mass, with a 7,000-square-foot limit. The ordinance will apply to 300,000 properties in single-family residential zones throughout Los Angeles. CITY OF LOS ANGELES ADOPTED ORDINANCES Green Building Program Ordinance Ordinance Number: 179820 Adopted Date: April 22, 2008 Effective Date: November 1, 2008 Standard of Sustainability Non-Resedential and High-Rise Residential Projects  Effective Date: May 22, 2008 Standard of Sustainable Excellence Effective Date: May 1, 2009 Standard of Sustainability Low-rise Residential Projects Density Bonus Ordinance Number: 179681 Adopted Date: February 20, 2008 Effective Date: April 15, 2008  Comprehensive Citywide Sign Regulations Ordinance Number: 179416 Adopted Date: December 04, 2007 Effective Date: December 20, 2007  Medical Marijuana Dispensary Interim Control Ordinance Ordinance Number: 179027 Adopted Date: August 01, 2007 Effective Date: September 14, 2007  Revisions to Parking Codes Ordinance Number: 179191 Adopted Date: September 12, 2007 Effective Date: November 5, 2007  Planning Fee Ordinance Ordinance Number: 178877 Effective Date: July 22, 2007  Automotive Use Ordinance Ordinance Number: 178,382 Effective Date: March 24, 2007 Adopted Date: January 24, 2007  Colorado Blvd. Specific Plan Amendment Ordinance Number: 178,098 Effective Date: January 9, 2007 Adopted Date: November 08, 2006  Eldercare Facilities Ordinance Ordinance Number: 178,063 Effective Date: December 30, 2006 Adopted Date: November 01, 2006  Residential Hotel Interim Control Ordinance Ordinance #179,191 Effective Date: November 5, 2007 Adopted Date: September 12, 2007  Protected Tree Ordinance Ordinance Number: 177404 Effective Date: April 23, 2006 Adopted Dated: February 28, 2006 SUMMARY OF MAJOR CHANGES TO CONTRACTOR LAW EFFECTIVE JANUARY 1, 2008 Business & Professions Code 101.7 – Boards and other entities within the Department of Consumer Affairs (DCA) must meet three (3) times each calendar year, and at least once in northern California and once in southern California. The DCA Director is authorized to excuse a Board from meeting upon showing cause, and/or to call a special meeting. 125.6 – In addition to facing disciplinary action if a licensed contractor refuses services based upon race, color, sex, religion, ancestry, disability, marital status, or national origin, licensees will face disciplinary action if they discriminate by refusing construction-related services based upon a prospective client's medical condition or sexual orientation. 7026.11 – The terms "mobile home" and "manufactured home" will now have separate and distinct definitions for reasons that are unrelated to Contractors License Law. The General Manufactured Housing (C-47) classification continues to be the appropriate specialty license for performing work relative to mobile homes and manufactured housing. 7027.5 – Landscape Contractors (C-27) licensed by the Contractors State License Board are authorized to enter into prime contracts to construct and install outdoor cooking centers and fireplaces, as long as the projects are included in a residential landscape project, and the fireplace is not attached to the dwelling. Other properly licensed specialty or general contractors would still be required for tasks that are beyond the scope of the landscape contractor classification. 7083.1 – Contractors whose licenses have expired, are canceled, or are otherwise inactive, must notify the CSLB Registrar of their current address(es), in writing, for five (5) years, instead of the previously designated three (3) years. 7091 – If a licensee is convicted of a crime that is substantially related to the qualifications, functions or duties of a contractor, the CSLB will have two (2) years from the date the conviction is discovered in which to file disciplinary action against the licensee. Also, the CSLB will have 18 months after the date a warranty expires in which to file a disciplinary action against a licensee who fails to honor the terms of the warranty. 7114 – As part of disciplinary action against a licensee, the Registrar of Contractors is authorized to order a licensee to pay a specific amount of money to an injured party if the licensee has aided an unlicensed person or allowed an unlicensed person to use his or her license. 7159.5 – A statute of limitations has been established for filing criminal charges against contractors who furnish a bond, bond equivalent, or Joint Control that is approved by the Registrar and who are exempt from referencing the down payment, schedule of payments, the Mechanic's Lien warning, or using the 10%/$1,000 down payment rule in a Home Improvement Contract where the cost of all labor and materials exceeds $500. The date the first payment is given to the contractor is the date used in establishing the statute of limitations for filing criminal charges. 7159.14 – For the case where a Service and Repair Contract is not reduced to writing as required by the law, the date the first payment is given to the contractor is the date used in establishing the statute of limitations for filing criminal charges. Related Laws Civil Code 2782 – Residential construction contracts and amendments that indicate a general contractor or subcontractor is to be held harmless for construction defects, injury or negligence are legally unenforceable as of January 1, 2008. Insurance Code 11760.1 – If an employer fails to provide access to an insurance company or its representative to perform a workers' compensation audit, the employer will be liable to pay the insurance company three (3) times the total premium, plus associated costs. SEC Proposes New Way for Investors to Get Financial Information on Companies The Securities and Exchange Commission today voted unanimously to formally propose using new technology to get important information to investors faster, more reliably, and at a lower cost. At the center of the SEC proposal is "interactive data" - computer "tags" similar in function to bar codes used to identify groceries and shipped packages. The interactive data tags uniquely identify individual items in a company's financial statement so they can be easily searched on the Internet, downloaded into spreadsheets, reorganized in databases, and put to any number of other comparative and analytical uses by investors, analysts, and journalists. The proposed rule would require all U.S. companies to provide financial information using interactive data beginning next year for the largest companies, and within three years for all public companies. Since 2005, companies have voluntarily submitted to the SEC financial information in interactive data format. The rules proposed today would require companies to provide this information according to a phase-in schedule. The SEC's proposed schedule would require companies using U.S. Generally Accepted Accounting Principles with a worldwide public float over $5 billion (approximately the 500 largest companies) to make financial disclosures using interactive data formatted in eXtensible Business Reporting Language (XBRL) for fiscal periods ending in late 2008. If adopted, the first interactive data provided under the new rules would be made public in early 2009. The remaining companies using U.S. GAAP would provide this disclosure over the following two years. Companies using International Financial Reporting Standards as issued by the International Accounting Standards Board would provide this disclosure for fiscal periods ending in late 2010. The disclosure would be provided as additional exhibits to annual and quarterly reports and registration statements. Companies also would be required to post this information on their websites. The required tagged disclosures would include companies' primary financial statements, notes, and financial statement schedules. Initially, companies would tag notes and schedules as blocks of text, and a year later, they would provide tags for the details within the notes and schedules. Companies filing under the proposed rule that use U.S. GAAP will use upgraded data tags issued April 28, 2008, by XBRL US, Inc. that were developed based on U.S. GAAP and on the review of hundreds of actual SEC filings. The SEC's EDGAR system will accept test filings using a February 11 version of these tags later this month, with the final April 28 version of the tags becoming usable in June. In addition, an interim system is expected to be announced shortly that will enable companies immediately to provide interactive data submissions to the SEC using the April 28 version of the tags. The SEC has had an interactive data pilot program for three years, beginning in 2005. It covered the financial statements of corporate filers. In addition, the SEC began an interactive data filing program for mutual fund risk return information in August 2007. Also last year, the SEC created an online database tagging executive compensation data for 500 large companies. Filers seeking a head start on data tagging are invited to formally join these SEC voluntary filing programs or informally practice with the new data tags. SEC Broadens Opportunities for Small Business Financing The Securities and Exchange Commission on May 15, 2008  broadened small business financing opportunities by adopting a rule amendment under the Investment Company Act to increase the availability of capital to certain smaller companies that may not have ready access to the public capital markets or other forms of conventional financing. Congress in 1980 established business development companies (BDCs), a type of publicly traded investment company, to help make capital more readily available to small, developing, and financially troubled businesses. To accomplish this purpose, the Investment Company Act generally prohibits a BDC from making any investment unless, at the time of the investment, at least 70 percent of its total assets are invested in securities of certain specific types of companies, including "eligible portfolio companies." The Commission has amended Rule 2a-46 to expand the definition of eligible portfolio company to include any domestic operating company with securities listed on a national securities exchange, if the company has a market capitalization of less than $250 million. The Investment Company Act defines eligible portfolio company to include a domestic operating company that, among other things, does not have any class of securities that are marginable under rules issued by the Federal Reserve Board. In 1998, for reasons unrelated to small business capital formation, the Federal Reserve Board amended its margin rules to include all publicly traded equity securities and most debt securities. These 1998 amendments had the unintended consequence of substantially reducing the number of companies that met the definition of eligible portfolio company. In 2006, the Commission adopted new rules under the Investment Company Act to address the effect of the Federal Reserve Board's 1998 amendments on the definition of eligible portfolio company. The Commission adopted Rule 2a 46 to include in the definition of eligible portfolio company all private companies and public companies whose securities are not listed on a national securities exchange. This is the rule that the Commission has amended on May 15, 2008. The Commission in 2006 also adopted Rule 55a-1 to conditionally permit a BDC to include in its 70 percent basket any follow on investments in a company that met the new definition of eligible portfolio company at the time of the BDC's initial investment in it.  The amendment to Rule 2a-46 will become effective in July 2008, 60 days after its publication in the Federal Register. The Securities and Exchange Commission on May 15, 2008  broadened small business financing opportunities by adopting a rule amendment under the Investment Company Act to increase the availability of capital to certain smaller companies that may not have ready access to the public capital markets or other forms of conventional financing. Congress in 1980 established business development companies (BDCs), a type of publicly traded investment company, to help make capital more readily available to small, developing, and financially troubled businesses. To accomplish this purpose, the Investment Company Act generally prohibits a BDC from making any investment unless, at the time of the investment, at least 70 percent of its total assets are invested in securities of certain specific types of companies, including "eligible portfolio companies." The Commission has amended Rule 2a-46 to expand the definition of eligible portfolio company to include any domestic operating company with securities listed on a national securities exchange, if the company has a market capitalization of less than $250 million. The Investment Company Act defines eligible portfolio company to include a domestic operating company that, among other things, does not have any class of securities that are marginable under rules issued by the Federal Reserve Board. In 1998, for reasons unrelated to small business capital formation, the Federal Reserve Board amended its margin rules to include all publicly traded equity securities and most debt securities. These 1998 amendments had the unintended consequence of substantially reducing the number of companies that met the definition of eligible portfolio company. In 2006, the Commission adopted new rules under the Investment Company Act to address the effect of the Federal Reserve Board's 1998 amendments on the definition of eligible portfolio company. The Commission adopted Rule 2a 46 to include in the definition of eligible portfolio company all private companies and public companies whose securities are not listed on a national securities exchange. This is the rule that the Commission has amended on May 15, 2008. The Commission in 2006 also adopted Rule 55a-1 to conditionally permit a BDC to include in its 70 percent basket any follow on investments in a company that met the new definition of eligible portfolio company at the time of the BDC's initial investment in it. The amendment to Rule 2a-46 will become effective in July 2008, 60 days after its publication in the Federal Register.