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Ordinance Number 734001 ORDINANCE NO. 734 AMENDMENT TO TITLE 8, CHAPTER 9 OF THE MUNICIPAL CODE - HOME WARRANTY PROGRAM AN ORDINANCE OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, AMENDING TITLE 8, CHAPTER 9 OF THE MUNICIPAL CODE - HOME WARRANTY PROGRAM THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Amendments. Title 8, Chapter 9, Sections 8-09.01, is hereby amended to read as follows: Section 8-9.01 Intent and Purpose. In keeping with the objectives of the General Plan which call for programs which provide high quality housing and which also provide for the maintenance of structures and appurtenant installations, the home warranty program described in this chapter is established. Further, the program shall require sellers of new residential dwelling units to provide home warranties to insure against faulty workmanship and materials and major construction defects. Compliance with the terms of this program shall be a condition of approval, amendment, extension or modification to any tentative maps. Title 8, Chapter 9, Section 8-9.02 is hereby amended to read as follows: Section 8-9.02 Definitions. For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows: (a) 'Buyer" shall mean any person, organization or homeowners, association which acquires a possessory interest, other than a leasehold, to a dwelling unit from a seller either directly or by mesne conveyance within the three (3) year warranty period. 'Buyer" shall not include any person, firm, corporation, partnership, association, or organization selling or offering for sale not more than four (4) dwelling units during each twelve (12) month period. 'Buyer" shall include all successors in interest during the three (3) year warranty period. (b) "Seller" shall mean any person, firm, corporation, partnership, association, or organization selling, or soliciting for sale, dwelling units within the City, whether in fee, under a contract of sale, option to purchase, or in a condominium development. "Seller" shall include any assignee or successor in interest of the original warranty seller but shall not include any person, firm, corporation, partnership, association, or organization selling or offering for sale not more than four (4) dwelling units during each twelve (12) month period. -1- (c) "Date of sale" shall mean the date a buyer acquires the right to occupy a dwelling unit or the date of his actual occupancy, whichever shall first occur. (d) "Dwelling unit" shall mean any residential structure, accessory structure, or condominium unit, including common ownership structures and accessory structures not previously occupied for residential purposes. (e) "Faulty workmanship and materials" shall mean: (1) Actual damages to the structural components of a dwelling unit or its driveways, services walks, gutters, masonry, roofs, and overhangs proximately resulting from: (a) negligent or faulty design and/or installation; (b) the installation of defective or improper materials; and/or (c) the failure to install materials. (2) Actual damages proximately resulting from improper grading or water penetration proximately resulting from faulty design or workmanship; and, (3) Actual damages to the plumbing, heating, electrical, and cooling systems serving the dwelling unit proximately resulting from faulty design, workmanship, installation, or defective or improper materials. (f) "Major construction defect" shall mean and include actual damages to the pad or the load-bearing portion of a dwelling unit and/or appurtenant and accessory structures, such as damages due to soil movement, which affects its load-bearing function and has a substantial adverse effect or is imminently likely to produce a substantially adverse effect on the use of the dwelling unit for residential purposes. Also included are major structure and/or construction defects which do or may render the structure unsafe or hazardous for occupancy. (g) "Residential purposes" shall mean the use of a structure for human habitation or the use of a common ownership or accessory structure for its intended purposes. (h) "Commercial home warranty provider" shall mean a commercial insurance entity or warranty corporation which is licensed to provide coverage as specified by this chapter. Title 8, Chapter 9, Section 8-9.04 is hereby amended to read as follows: Section 8-9.04 Warranties: Form. (a) The seller shall provide evidence of active enrollment with a commercial home warranty provider such that each dwelling unit offered for sale is -2- provided warranty coverage in accordance with the terms of this chapter. (b) Seller shall submit documentation of his enrollment with a commercial home warranty provider for City review. Seller shall also provide documentation of coverage for each dwelling unit for which warranty is being provided. Title 8, Chapter 9, Section 8-9.06 is here by amended to read as follows: Section 8-9.06 Compliance with Terms of Warranties. (a) The buyer shall promptly notify the seller, with a duplicate copy to the Administrative Services Officer of the City, of any defects which are covered by the home warranty pursuant to this chapter. (b) The seller, upon the receipt of such notification, shall promptly respond to the notification, cause an investigation to be made, and either: (1) At his sole cost and expense, correct all defects in the home covered by the warranty; or, (2) Pay to the buyer the reasonable cost of correcting such defects provided the buyer has provided estimates from two (2) licensed contractors specifying the full cost of correcting the defects. (c) Should the seller refuse or fail to discharge his obligations as specified in this section, the buyer shall be entitled to make claim directly upon the carrier of commercial home warranty coverage in which the seller is enrolled for purposes of this chapter. Section 8-9.07 is hereby added to Title 8, Chapter 9, and reads as follows: Section 8-9.07 Administration Fee. Each seller subject to the provisions of this ordinance shall pay to the City at the time of providing proof of membership in a commercial home warranty program, an administration fee in an amount to be set by resolution of the City Council which is reasonably calculated to reimburse City for the actual cost of administering the requirements of the program. Said fee shall be non-refundable and subject to revision by resolution. passage. SECTION 2. Effective Date. This Ordinance shall take effect and be in force thirty (30) days after its -3- „ uWt SECTION 3. City Clerk's Certification. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and adoption as required by law; or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five (5) days prior to the date of adoption of this Ordinance; and, within fifteen (15) days after adoption, the City Clerk shall cause to be published, the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of the City Clerk. PASSED, APPROVED, AND ADOPTED this 17th day of August , 1993. ATTEST: CITY CLERK MM , MAYOR STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF SAN JUAN CAPISTRANO ) 1, CHERYL JOHNSON, City Clerk of the City of San Juan Capistrano, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Ordinance No. 734 which was introduced at a meeting of the City Council of the City of San Juan Capistrano, California, held on August 3rd , 1993, and adopted at a meeting held on August 17th , 1993, by the following vote: AYES: Council Members Hausdorfer, Campbell, Vasquez and Mayor Jones NOES: None ABSTAIN: None ABSENT: Council Member Nash (SEAL) CHERYL JOHNSON, Y LERK -5-