2005 California Civil Code Sections 1917.150-1917.151 Article 5. Improvements

1917.150.  The borrower may have the value of capital improvements
added to the borrower's cost of the property, for purposes of
determining net appreciated value and the amount of contingent
deferred interest, but only if the procedures set forth in this
article are followed.
   (a) Within 60 days following the completion of capital
improvements during any 12-month period with a cost in excess of two
thousand five hundred dollars ($2,500), the borrower shall send by
first-class mail a notice of the completion of the improvements to
the lender and shall submit proof of cost and an estimate of the
increase in value of the property by reason of the improvements.
   (b) If, within 30 days of receipt of the notice, the lender
questions the claimed increase in value of the property by reason of
the improvements, the lender and the borrower may, by mutual
agreement, establish the value of the capital improvements or the
lender may require appraisal of the property.  An appraisal shall be
made to determine the increase in value of the property, if any, by
reason of the improvements, by two appraisers selected in the same
manner specified in Section 1917.142.  If appraisals are performed,
the increase in value resulting from the improvements for the
purposes of this section, shall be one-half of the sum of the two
appraisals.  The cost of the appraiser selected by the borrower shall
be borne by the borrower, and the cost of the appraiser selected by
the lender shall be borne by the lender.
   (c) A credit for the value of capital improvements shall be
provided if the increase in value of the property resulting therefrom
is determined pursuant to subdivision (b) to exceed two thousand
five hundred dollars ($2,500).
   (d) If 50 percent or more of the value of the labor or other work
on the improvements was performed by the  borrower, then the actual
cost of the improvements need not exceed two thousand five hundred
dollars ($2,500) for purposes of making application under subdivision
(a).
1917.151.  Nothing in this article shall preclude a shared
appreciation loan from providing the borrower with a greater credit
for improvements than specified in this article, provided the
relevant disclosures required by Article 7 (commencing with Section
1917.170) are appropriately modified to accurately disclose the terms
of the credit.