ARTICLE 2.5. Leasing Facilities [17430. - 17447.]

Cal. Education Code - EDC 2.5.

in effect

Cal. Education Code - EDC § 17430. Section 17430.

Notwithstanding any other law, the governing board of any school district may enter into a lease or agreement for any school facilities pursuant to this article with a nonprofit corporation organized under Division 2 (commencing with Section 5000) of Title 1 of the Corporations Code if the articles of incorporation or bylaws of the nonprofit corporation provide for both of the following conditions: (a) No person shall be eligible to serve as a member or director of the nonprofit corporation, except a person initially approved by resolution of the governing board of the school district. (b) No part of the net earnings of the nonprofit corporation shall inure to the benefit of any member, private shareholder, individual, person, firm, or corporation, excepting only the school district. Any facilities constructed by a nonprofit corporation pursuant to a lease or agreement entered into pursuant to this article shall be constructed under a contract awarded to the lowest responsible bidder pursuant to Chapter 3.5 (commencing with Section 4220) of Division 5 of Title 1 of the Government Code.

Cal. Education Code - EDC § 17431. Section 17431.

Notwithstanding any other law, an owner’s development lien created pursuant to this article is a covenant for the benefit of the school district or districts expressly described therein which shall, upon recordation with the county recorder of the county in which the real property is located, run with the land described in the document by which the lien is placed of record. The owner’s development lien shall be binding upon successors in interest, during their ownership, of any portion of such land affected thereby and each person having an interest therein derived through any owner of the land owned by the covenantor. The covenant running with the land created by the owner’s development lien as provided in this section constitutes a valid covenant notwithstanding the fact that it is created in connection with only one estate and is imposed upon a single parcel and is intended to be for the benefit of a school district or districts who are not a landowner or owners.

Cal. Education Code - EDC § 17432. Section 17432.

The sale of bonds for the accomplishment of a school facilities plan shall be subject to the approval of the State Treasurer. Prior to the sale of any bonds, the State Allocation Board shall determine that the proposed facilities to be constructed with the bond proceeds are consistent with its building area and costs standards as to the area and facilities described in the school facilities plan pursuant to which the bonds are to be issued. The sale of the bonds shall be conducted in compliance with Chapter 10 (commencing with Section 5800) of Division 6 of Title 1 of the Government Code. However, the bonds may be sold at a negotiated sale. The State Treasurer and the State Allocation Board may impose a charge and collect a fee for reimbursement of actual costs incurred in accomplishing the approval and determination.

Cal. Education Code - EDC § 17433. Section 17433.

Any rental payments required by any lease or agreement entered into pursuant to this article may be paid in annual installments or may be prepaid from state funds or other funds of the school district permissible by law to be used for those purposes at any time during the period of the lease or agreement.

Cal. Education Code - EDC § 17434. Section 17434.

Whenever the governing board determines that a lease or agreement should be entered into with a nonprofit corporation, the board shall adopt a resolution of intention. The board shall have the following powers and shall state in the resolution all of the following: (a) The intention of the board to formulate a school facilities plan for the school district or a portion thereof. (b) A summary description of the facilities to be included within the school facilities plan. (c) The estimated expense of carrying out the school facilities plan, including all incidental expenses. (d) That a map depicting the exterior boundaries of the territory to be benefited by the school facilities plan is on file with the secretary of the school district and is available for inspection by any person or persons interested. (e) A legal description of the real property upon which an owner’s development lien is to be imposed and to be recorded with the county recorder of the county or counties in which the real property is located. (f) The intention of the board to cause the formation of a nonprofit corporation the purpose of which is to issue bonds, notes, or other obligations to finance the construction of the facilities included within the school facilities plan and to lease the facilities to the school district. (g) That pursuant to Section 17438, an owner’s development lien shall be imposed to the benefit of the school district on all real property described in the map on file with the secretary of the school district, exclusive of real property subject to restrictions that preclude development thereon, which shall specify the amount thereof and the maximum period of time over which the amount is to be paid, together with a specified maximum interest rate. (h) That the school district may enforce the lien, as to any amount or amounts in default, by judicial foreclosure proceedings as provided for in Section 17444. (i) That the owner’s development lien provided for in this article shall be imposed with the consent of all owners within the final map of the boundaries in equal amounts on each acre or portion thereof within the territory to be benefited by the school facilities plan or imposed pursuant to Section 17447. (j) That the proposed facilities may or may not be constructed within the boundaries of the territory to be benefited by the school facilities plan as depicted on the map described in subdivision (d). (k) That the benefited property may include noncontiguous territory and that real property may subsequently be included by the governing board, subject to the assumption of a pro rata share of all obligations incurred or to be incurred, plus an amount not less than all amounts collected pursuant to the owner’s development lien per acre or portion thereof.

Cal. Education Code - EDC § 17435. Section 17435.

Subsequent to the adoption of the resolution pursuant to Section 17434, the secretary of the school district shall mail a copy of such resolution to each owner of property within the territory to be benefited from the school facilities plan as shown on the last equalized assessment roll, as well as the persons that the secretary can reasonably determine may have an interest in the property, except for those persons who have filed written waivers to receive copies of the resolution with the secretary of the district. A copy of the resolution shall be published pursuant to Section 6066 of the Government Code. The school district also shall give the notice to any persons who have in writing requested notice of the proceedings. The secretary of the district also shall mail copies of the resolution to any beneficiary under any deeds of trust on property within the territory to be benefited by the school facilities plan unless written waivers to receive the copies have been filed with the secretary of the school district. Any owner of real property or owner of an interest in real property, such as a trustee or beneficiary under a deed of trust or similar secured interest, may file written objections to the implementation of the school facilities plan with the secretary of the district, which written objections shall be filed with the secretary no later than 30 days from the date of the mailing of a copy of the resolution.

Cal. Education Code - EDC § 17436. Section 17436.

No sooner than 30 days from the date mailing occurs pursuant to Section 17435, the governing board of the school district may consider all written objections filed with the secretary of the school district and may, at its discretion, discontinue proceedings pursuant to this article or may adopt, after consideration of written objections, a resolution ordering the implementation of the school facilities plan for the purpose and for the benefit of that territory described in the resolution of intention, provided the owners described in Section 17435 have consented in writing to the owner’s development lien.

Cal. Education Code - EDC § 17437. Section 17437.

The resolution ordering implementation of the school facilities plan shall state the following: (a) A legal description of the real property to which an owner’s development lien is to be imposed. (b) The names of all owners of record of the real property to which an owner’s development lien is to be imposed. (c) The total amount of the owner’s development lien to benefit the school district as described in subdivision (g) of Section 17434. (d) The real property described in the resolution shall be subject to an owner’s development lien for a pro rata share on each acre or portion thereof pursuant to this article or any other amount as herein provided. (e) That all owners of the real property described in the resolution have agreed on their behalf and on behalf of their successors in interest to pay the designated share of the owner’s development lien, have acknowledged that such agreement constitutes a covenant running with the land pursuant to Section 17431, have agreed that the obligation created is secured by the owner’s development lien as provided in this article, and have consented to the implementation of the owner’s development lien. (f) That a lease or agreement will be entered into with a nonprofit corporation.

Cal. Education Code - EDC § 17438. Section 17438.

After adoption of the resolution ordering implementation of the school facilities plan, the resolution shall be recorded with the county recorder of the county or counties in which the real property subject to the owner’s development lien is located. Upon recordation of the resolution, an owner’s development lien is hereby created and attaches to the real property described therein for the cost of implementing the school facilities plan.

Cal. Education Code - EDC § 17439. Section 17439.

No sooner than 90 days from the date a resolution is recorded pursuant to Section 17438, a nonprofit corporation which has entered into a lease or agreement with the school district pursuant to this article may issue bonds for the purpose of financing all or a portion of the school facilities plan approved pursuant to procedures of this article.

Cal. Education Code - EDC § 17440. Section 17440.

Except as provided in Section 2192.1 of the Revenue and Taxation Code, an owner’s development lien imposed for the purposes of this article shall have the same priority as special assessment liens described in Article 13 (commencing with Section 53930) of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code. Except as to any due, unpaid and delinquent amount, the owner’s development lien shall not be deemed to be a prior encumbrance within the meaning of Section 766 of the Financial Code. From and after the date of the recording of the owner’s development lien, all persons shall be deemed to have notice of the contents thereof.

Cal. Education Code - EDC § 17441. Section 17441.

Additional territory may be added to the area described as being benefited by the school facilities plan in the discretion of the governing board, provided the owners of the real property to be added consent to the imposition of a lien for all present and future obligations as set forth in the school facilities plan and agree to pay to the district an amount at least equal to all amounts collected pursuant to the owner’s development lien. Any additional territory added to the area benefited by the school facilities plan pursuant to this section shall be the subject of a resolution described in Section 17437 and recorded pursuant to Section 17438.

Cal. Education Code - EDC § 17442. Section 17442.

The governing board may bill and collect pursuant to the owner’s development lien and collect payments from the owners of all property subject to an owner’s development lien in amounts sufficient for the district to meet its rental obligations under any lease or agreement and to pay or reimburse any expenses incurred to implement the school facilities plan. The amounts due pursuant to the owner’s development liens shall be billed and collected in equal amounts on each acre or portion thereof as provided for in the owner’s development lien or as provided for in Sections 17437 and 17447. A school district electing to utilize the provisions of this article may enter into a contract with the county tax collector for the billing of the annual amounts billed pursuant to this section. The tax collector may collect these amounts together with and not separate from the taxes on the property. The county tax collector shall be entitled to a fee for the reasonable value of his or her services.

Cal. Education Code - EDC § 17443. Section 17443.

An owner’s development lien may be released by the governing board, provided funds are deposited with the board to pay the unpaid principal amount of the lien, plus any prepayment charges in an amount to be determined by the governing board. Upon receipt of these amounts, the board shall adopt a resolution specifically providing a legal description of the real property and the record title owners thereof subject to the release. The resolution shall be recorded with the county recorder of the county or counties in which the real property is located. Upon recordation of the resolution, the owner’s development lien shall be discharged and of no further effect.

Cal. Education Code - EDC § 17444. Section 17444.

(a) Any installment of an owner’s development lien created pursuant to this article shall become delinquent 30 days following billing thereof if unpaid, or if the installment is being collected by the county tax collector, at the time general taxes become delinquent. An installment shall be in default 30 days after written notice of the delinquency has been given by certified or registered mail to the record owner of the property subject to the lien and all lenders of record. (b) The governing board, not later than four years after the date of default of any payment, may order that the amount be collected by an action brought in superior court to foreclose against the real property subject to the owner’s development lien for the then delinquent installment of the owner’s development lien. The action shall affect only the delinquent amounts and shall not accelerate or require payment of any remaining amount of the owner’s development lien. (c) The lease agreement between the governing board and the nonprofit corporation may contain covenants for the benefit of bondholders providing that the governing board shall commence and diligently prosecute to completion any foreclosure action regarding delinquent installments of an owner’s development lien. The lease agreement may specify a deadline for commencement of the foreclosure action and any other terms and conditions that the governing board may determine to be reasonable. (d) The governing board may assign its rights under this section to the nonprofit corporation or to any trustee under the resolution adopted pursuant to Section 17437. (e) Costs in the action shall be fixed and allowed by the court and shall include, but are not limited to, reasonable attorneys’ fees, interest, penalties and other charges or advances authorized by this article, and when so fixed and allowed by the court, the costs shall be included in the judgment. The amount of penalties, costs, and interest due shall be calculated up to the date of judgment. (f) All matters pertaining to foreclosure, execution and sale shall be governed by the then existing law of California. However, notwithstanding any other law, the owner’s right of redemption shall be limited to 60 days following the date of sale of the owner’s interest. The owner’s development lien shall continue as security for all future required installment payments. Any remaining funds after foreclosure and payment of all obligations and costs of foreclosure of the delinquent installment of the owner’s development lien shall be paid pursuant to the priority of encumbrances of record and to the owner or owner’s successor as of the date of initiation of the foreclosure proceeding. (g) Foreclosures of installments of the owner’s development lien pursuant to this article shall not affect the priority of any scheme of community development approved by the Bureau of Real Estate, including, but not limited to, subdivision maps, condominium plans, covenants, conditions, restrictions, and easements whether recorded prior to or subsequent to the owner’s development lien.

Cal. Education Code - EDC § 17445. Section 17445.

Any action to contest the validity of this article may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure, except that an appeal from any judgment rendered in such action shall be made directly to the Supreme Court of the State of California.

Cal. Education Code - EDC § 17446. Section 17446.

Notwithstanding any other provision contained in this article, and as an alternative method of accomplishing the purposes of this article, owner’s development liens may be imposed in unequal amounts on each acre or portion thereof in order that the liens may be based upon equal or equitable amounts for each individual dwelling unit after subdivision into lots or condominium units.

Cal. Education Code - EDC § 17447. Section 17447.

(a) As an alternate provision, owner’s development liens previously imposed upon a particular parcel or parcels of property which are subsequently subdivided may be apportioned to provide that the owner’s development liens shall be imposed upon the individual lots and condominium units created by one or more subdivisions. The liens need not necessarily be imposed upon a pro rata basis based upon acreage, but may be imposed pursuant to Section 17446 to provide for an equal or equitable portion of the total lien to be imposed upon each individual dwelling unit or resulting separate parcel. In imposing the owner’s development liens on individual lots and condominium units, there may be excluded from the liens property which becomes subject to restrictions that preclude development thereon including, but not limited to, areas of common ownership, streets, and easements. Prior to the apportionments of an owner’s development lien pursuant to this section, the governing board of the school district shall adopt a resolution which shall include the following: (1) A legal description of the real property on which an owner’s development lien has previously been imposed. (2) The intention of the governing board to apportion the owner’s development lien to provide for an equitable apportionment of the lien upon individual lots and condominium units within the properties to be subdivided. (3) A map showing the subdivided lands, together with the proposed owner’s development liens to be imposed upon the individual lots and condominium units within one or more such subdivisions. (b) Upon adoption of the resolution, the secretary of the school district shall mail a copy of the resolution to each owner of the property upon which the owner’s development lien has previously been imposed as shown on the last equalized assessment roll. A copy of this resolution shall be published pursuant to Section 6066 of the Government Code. The secretary of the school district shall mail copies of the resolution to any beneficiary of deeds of trust upon the property. No sooner than 30 days after the mailings, the governing board may consider objections to the proposed apportionment of the owner’s development lien. Provided that all owners of the parcels over which the lien is to be apportioned, including any beneficiary under any deeds of trust, or any beneficiary under any deed of trust, have consented, the owner’s development lien may be apportioned to provide for an equitable portion of the total development lien to be placed upon the individual lots, condominium units or separate parcels created within one or more of the subdivisions. A resolution approving the apportionment of the owner’s development lien shall thereafter be adopted and recorded with the county recorder of the county or counties in which the real property is located. Apportionment pursuant to this section shall be effective upon the recordation. The apportionment of the owner’s development lien shall in no way either increase or decrease the total amount of the owner’s development lien which has previously been imposed upon the properties involved. However, the original owner’s development lien which had been previously imposed shall be released of record at the time the apportionment of the lien pursuant to this section is recorded.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026