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2009 California Military and Veterans Code - Section 270-270.43 :: Article 4. Farm And Home Purchase
MILITARY AND VETERANS CODESECTION 270-270.43
270. This article may be cited as the California National Guard Members' Farm and Home Purchase Act of 1978. 270.01. (a) The Legislature finds and declares that the California National Guard exists to provide a military organization in California with the capability to: (1) Protect the lives and property of the people of the state during periods of natural disaster and civil disturbances. (2) Perform other functions required by the California Military and Veterans Code or as directed by the Governor. (3) Provide military units ready for federal mobilization. (b) The Legislature further finds and declares that the California National Guard performs an essential public purpose in protecting the health, safety, and property of California's citizens; that in order to fulfill its objectives, it is necessary for the California National Guard to have sufficient human resources; and that the elimination of the military draft has had a negative impact on the California National Guard's ability to maintain an adequate strength level to meet its responsibilities, so that the Military Department is concerned that it may not be able to provide a sufficient number of persons to deal with natural or man-caused disasters and emergencies. (c) It is, therefore, the intent of the Legislature that, to fulfill the public program of maintaining required strength in the California National Guard, an enlistment inducement should be provided by making low-interest farm and home loans available to members who serve the state faithfully for a period of at least one year of a regular enlistment period, since incentive programs such as this have been highly successful in other states and have resulted in substantially higher enlistment rates; and that, in addition, this type of program would enhance the concept of a volunteer armed service by granting a state benefit at no anticipated cost to the taxpayer. (d) The Legislature further finds and declares that the enactment of this article serves a substantial public purpose and that members of the California National Guard are benefited only as an incident to the general public purpose intended by this article. 270.02. The provisions of this article are applicable, and the benefits conferred thereby are available, to the commissioned officers, warrant officers, and enlisted members of the California National Guard. In the event that there are insufficient funds at any time to meet the requirements of all applicants under this article, the following order of priority shall apply: (a) First priority shall be given to commissioned officers of the grade of captain (0-3) and below, warrant officers, and enlisted members. (b) Second priority shall be given to commissioned officers of the grade of major (0-4) and above. 270.03. As used in this article: (a) "Farm" means a tract of land, which, in the opinion of the department, is capable of producing sufficiently to provide a living for the purchaser and his or her dependents. (b) "Home" means a parcel of real estate upon which there is a dwelling house and such other buildings as will, in the opinion of the department, suit the needs of the purchaser and the purchaser's dependents as a place of abode. It includes a "condominium," as defined in subdivision (h). "Home" also includes a "mobilehome," as defined in subdivision (k). (c) "Purchaser" means a member of the California National Guard or any person who has entered into a contract of purchase of a farm or home from the department. (d) "Purchase price" means the price which the department pays for any farm or home. (e) "Selling price" means the price for which the department sells any farm or home. (f) "Initial payment" means the first payment to be made by a purchaser to the department for a farm or home. (g) "Progress payment plan" means payment by the department for improvements on real property in installments as work progresses. (h) "Condominium" means an estate in real property consisting of an undivided interest in common in a portion of a parcel of real property together with a separate interest in space in a residential building on the real property, such as an apartment, which, in the opinion of the department, suits the needs of the purchaser and the purchaser's dependents as a place of abode. A condominium may include, in addition, a separate interest in other portions of the real property. "Condominium" also includes a half-duplex and a patio home when the structure is situated on its own property line. (i) "Effective rate of interest" means the average rate of interest on the unpaid balance due on a participation contract to which the department's legal rights are subject, and the rate of interest on the unpaid balance of the purchase price, as determined by the department. (j) "Participation contract" means an obligation secured by a deed of trust or mortgage, or other security interest established pursuant to regulations of the department. (k) "Mobilehome" means either a parcel of real estate, or an undivided interest in common in a portion of a parcel of real property, on which is sited one or more mobilehome modules which will, in the opinion of the department, suit the needs of the purchaser and the purchaser's dependents as a place of abode and meets all requirements of local governmental jurisdictions. However, where the mobilehome module or modules are sited on trust land, "local governmental jurisdictions" means the tribal governing body. For purposes of this subdivision, "module" means a section of a mobilehome at least 10 feet wide and at least 40 feet long. (l) "Member" means an individual on active National Guard status and assigned to a federally recognized unit of the California National Guard. (m) "Indian member" means a member as defined in subdivision (l) who in addition either belongs to an Indian tribe, band, group, reservation, rancheria, or community which is recognized by the United States as eligible for services from the United States Bureau of Indian Affairs or is an Indian beneficiary and who is eligible under this article for purchase by the department of a home or farm sited on trust land. (n) "Trust land," with respect to an Indian member, means land held in trust by the United States government for individual Indians, Indians who belong to Indian tribes, or Indian tribes. (o) "Allotment trust land" means land held by the United States under the Indian General Allotment Act of 1887, as amended, (Chapter 9 (commencing with Section 331) of Title 25 of the United States Code), in trust for an individual Indian or for two or more Indians holding individual interests in common. It includes both trust and restricted public domain allotments and allotments within the boundaries of an Indian reservation. (p) "Tribal trust land" means land held in trust by the United States for an Indian tribe or band. (q) "Tribe" means any Indian tribe, band, group, reservation, rancheria, or community which is recognized by the United States as eligible for services from the United States Bureau of Indian Affairs. (r) "Indian beneficiary" means an Indian for whom land is held in trust by the United States government. (s) "Department" means the Department of Veterans Affairs. 270.04. The administration of the provisions of this article is vested in the Department of Veterans Affairs. The department shall adopt rules and regulations in keeping with the purpose of this article to establish preferences in the granting of benefits conferred by this article. 270.05. (a) No benefits shall be awarded pursuant to this article nor application therefor accepted until on and after January 1, 1980. Persons becoming members on and after January 1, 1979, shall, to be eligible for benefits pursuant to this article, be enlisted or commissioned for a period of not less than six years and shall have not less than one year of satisfactory service at the time of application for benefits. (b) Members as of January 1, 1979, shall, to be eligible for benefits pursuant to this article, have not less than one year of satisfactory service at the time of application and shall extend their commitment for the minimum amount of time prescribed by federal law or regulation. (c) No member shall be eligible for benefits pursuant to this article who is presently receiving benefits pursuant to the Veterans' Farm and Home Purchase Act of 1943 (Article 3 (commencing with Section 985) of Chapter 6 of Division 4) or the Veterans' Farm and Home Purchase Act of 1974 (Article 3.1 (commencing with Section 987.50) of Chapter 6 of Division 4). (d) Members who either have been honorably discharged from any branch of the United States Armed Forces or have served in the California National Guard for 10 or more years, and who otherwise qualify under this section, shall be eligible for benefits pursuant to this article after 90 days of satisfactory service at the time of application for benefits. 270.06. The department shall prescribe and determine the qualifications of all members. Any member desiring to benefit hereunder, shall submit to the department information, in such form as the department prescribes, which will enable the department to determine his eligibility and qualifications. The department may make further inquiries and investigations in order to determine such eligibility and qualifications. Members who are otherwise qualified and who were wounded or disabled as a result of their service shall be given first preference in the benefits conferred by this article. The department shall determine, in each case, whether or not the member was wounded or disabled as a result of service. The following group shall be given second preference in the benefits conferred by this article: (a) The unremarried spouse of members killed in the line of duty. (b) The unremarried spouse of members designated by the armed forces as missing in action. Nothing in this section regarding preferences shall affect any eligibility requirement for benefits conferred by this article. 270.07. All applications for the benefits contained in this article shall be filed with the department at least one year prior to the date of the applicant's discharge from the National Guard, except applications filed by either: (a) Members who were wounded or are disabled as a result of National Guard service; or (b) Members who were previously declared prisoners of war. 270.08. (a) If a member dies after filing his application for a farm or a home, and his application setting forth his eligibility and qualifications is subsequently approved, the member's surviving spouse may, in the discretion of the department, succeed to his rights under the application, and may be entitled to the rights, privileges, and benefits under this article that would have been his, but for his death. The contract of purchase which the department otherwise would have made with such member may be made with the member's surviving spouse. (b) If a member was killed in the line of duty, he shall be considered to be a "member" for the purposes of this article, and the member's unremarried spouse may file an application, may be entitled to the same rights, privileges and benefits and may contract with the department as provided in the case of a surviving spouse under the provisions of subdivision (a) of this section. 270.09. When a member has been authorized by the department to select a farm or home, he shall submit his selection in such form as the department prescribes. 270.10. The department may acquire a farm or home from the owner thereof, or may contract with a member for the construction of a dwelling house and other improvements for a farm or home, upon the terms agreed if: (a) The department is satisfied of the desirability of the property submitted. (b) The member has agreed with the department that the member or the member's immediate family will actually reside on the property within 60 days from the date of purchase by the department or, if the residence on the property is not complete on the date of purchase, within 60 days after the residence is completed. (c) The sum to be expended by the department pursuant to a contract for the construction of a dwelling house and other improvements does not exceed fifty-five thousand dollars ($55,000) or, for members who qualify under subdivision (d) of Section 270.05, not to exceed seventy-five thousand dollars ($75,000). (d) Where the department is to contract with a member for the construction of a dwelling house and other buildings, or for the purchase of a mobilehome: (1) The member is the owner in fee of the real property on which the dwelling house and other buildings are to be constructed, or is the owner in fee of the real property or the owner of an undivided interest in common in a portion of a parcel of real property on which a mobilehome is to be situated, and agrees to convey that property to the department without cost. (2) The member has paid a reasonable fee set by the department to cover the cost of the preliminary service of the department necessary to process the application. (3) The member has filed with the department adequate plans and specifications for the improvements to be constructed upon the real property, together with a contract, executed by a contractor licensed by the State of California, for the construction of the improvements in accordance with the plans and specifications within eight months after the acquisition of the real property by the department, and a bond, that is executed by a surety company authorized to do business in the State of California, obtained by the contractor providing for compliance with the terms of the contract and for the payment of materialmen and labor furnishing material or labor on the jobs. (4) The plans, specifications, contract, and bond are approved by the department. (5) The member has placed in escrow all sums of money to be advanced by him or her where the cost is in excess of the maximum that may be expended by the department. As used in this section, "immediate family" includes only the following: Spouse, children, either natural or adoptive; and the parents if they are dependent upon the member for 50 percent or more of their support. 270.101. (a) For purposes of the construction of a dwelling house or other improvements for a farm or home or the acquisition of a farm or home for an Indian member pursuant to this article, references to property or real property include the Indian member's beneficial interest in trust land held by the United States for that member and a leasehold interest acquired by the Indian member from an Indian beneficiary when the Indian member is not a beneficiary of trust land; references to the purchase or acquisition of property or real property include the assignment of an Indian member's beneficial interest in trust land held by the United States for that member and a leasehold interest in trust land acquired by the Indian member from an Indian beneficiary; references to the sale of property or real property include the assignment of an Indian member's beneficial interest in trust land held by the United States for that member and a leasehold interest in trust land acquired by the Indian member from an Indian beneficiary; and references to purchaser, seller, purchase price, and selling price refer to the acquisition or sale of a home situated or constructed upon or a farm comprising an assignment of an Indian member's beneficial interest in trust land held by the United States for that member or a leasehold interest in trust land acquired by the Indian member from an Indian beneficiary. (b) Subject to the conditions and limitations specified in Section 270.103, the department may acquire an Indian member's leasehold interest in allotment trust land, or a sufficient portion of the leasehold interest necessary to secure the loan, as determined by the department and the Bureau of Indian Affairs, for the purpose of entering into a contract with the Indian member for the acquisition of a farm or home or for the construction of a dwelling house or other improvements for a farm or home or for the purchase and installation of a mobilehome on the leasehold land. (c) Subject to the conditions and limitations specified in Section 270.103, the department may acquire an assignment of an Indian member's beneficial interest in trust land held by the United States for that member, or a sufficient portion of the beneficial interest necessary to secure the loan, as determined by the department and the Bureau of Indian Affairs, for the purpose of entering into a contract for the acquisition of a farm or home or for the construction of a dwelling house or other improvements for a farm or home or for the purchase of a mobilehome on trust land assigned to the department by the Indian member beneficiary. (d) For purposes of this section, the leasehold interest to be acquired by the department shall have been granted by the person or persons for whom the land is held in trust for a term of at least 25 years renewable without notice on the same terms and conditions for an additional period of at least 25 years. The lease shall be in a form acceptable to the department and to the United States Secretary of the Interior. The Indian member shall satisfy the department that the department and its assignees will have access to the property for the term of the lease. The Indian member shall assign the lease to the department without cost and shall obtain the consent of the United States Secretary of the Interior to that assignment. (e) For purposes of this section, the beneficial interest to be assigned by the Indian member shall be assigned to the department as security for a contract entered into pursuant to this article. The assignment shall be in a form acceptable to the department and to the United States Secretary of the Interior. The Indian beneficiary member shall satisfy the department that the department and its assignees will have access to the property for the term of the assignment. The beneficial interest of the Indian beneficiary member shall be assigned at no cost to the department and with the consent of the United States Secretary of the Interior. 270.102. (a) Subject to the conditions and limitations specified in Section 270.103, the department may acquire an Indian member's leasehold interest in tribal trust land for the purpose of entering into a contract with the Indian member for the acquisition of a farm or home or for the construction of a dwelling house or other improvements for a farm or home or for the purchase and installation of a mobilehome on the leasehold land. (b) For purposes of this section, the leasehold interest to be acquired by the department shall have been granted by the tribe for which the land is held in trust to the Indian member for a term of at least 25 years renewable without notice on the same terms and conditions for an additional period of at least 25 years. The lease shall be in a form acceptable to the tribe, the department, and the United States Secretary of the Interior, shall be duly executed in accordance with the tribe's constitution and bylaws or other tribal laws, and shall provide that the Indian member and the Indian member' s assignees shall have access to the property for the term of the lease. The Indian member shall assign the lease to the department without cost and shall obtain the consent of the tribe and the United States Secretary of the Interior to that assignment. 270.103. (a) The department may acquire an assignment of an Indian member's beneficial interest in trust land held by the United States for that member or a leasehold interest in trust land acquired by the Indian member from an Indian beneficiary and contract with an Indian member as provided in Sections 270.101 and 270.102 upon the terms agreed, if all of the following conditions are met: (1) The department is satisfied of the desirability of the property submitted. (2) The Indian member has agreed with the department that the Indian member or the Indian member's immediate family will actually reside on the property within 60 days from the date of the acquisition by the department or, if the residence on the property is not complete on the date of acquisition, within 60 days after the residence is completed. (3) The sum to be expended by the department pursuant to a contract for the acquisition of a home or the construction of a dwelling house and other improvements does not exceed forty-three thousand dollars ($43,000) or, for members who qualify under subdivision (d) of Section 270.05, not to exceed fifty-five thousand dollars ($55,000). (4) The Indian member has paid a reasonable fee set by the department to cover the cost of preliminary service of the department that may be necessary to process the application. (5) The Indian member has filed with the department adequate plans and specifications for the improvements to be constructed upon the real property, together with a contract executed by a contractor licensed by the State of California or by an Indian contractor approved by the department for the construction of the improvements in accordance with the plans and specifications within eight months after the assignment of the Indian member's beneficial interest or acquisition of the Indian member's leasehold interest in the real property by the department, and a bond, which is executed by a surety company authorized to do business in the State of California, obtained by the contractor providing for compliance with the terms of the contract and for the payment of persons furnishing material or labor on the job. (6) The plans, specifications, contract, and bond are approved by the department. (7) The Indian member has placed in escrow all sums of money to be advanced by the Indian member where the cost is in excess of the maximum that may be expended by the department. (b) As used in this section, "immediate family" includes only the member's spouse; children, either natural or adoptive; and the parents, if they are dependent upon the member for 50 percent or more of their support. 270.11. The department may purchase property, subject to a participation contract providing for a loan term of not less than 23 years. In no event shall the purchase price plus the participation contract exceed fifty-five thousand dollars ($55,000) or, for members who qualify under subdivision (d) of Section 270.05, not to exceed seventy-five thousand dollars ($75,000) or equal more than 95 percent of the market value of the property as determined by department appraisal, whichever is the lower amount. 270.12. The department, after consummating a purchase under the provisions of this article and the member having occupied the property as required by Section 270.10, may waive the occupancy requirement for a period not to exceed four years on a showing of good cause. The department may also waive the occupancy requirement for any period of time if the property is a farm and if the member personally cultivates the property and harvests the crops or tends livestock. The department shall establish standards for the occupancy waiver and shall make those standards known. 270.13. Notwithstanding other provisions of this article relating to the occupancy, leasing, letting, or subletting of a farm or home acquired pursuant to this article, in the case of any member who after consummating a purchase of a farm or home under this article and occupying such farm or home enters the active military, naval, or air service of the United States, and is required to move pursuant to orders to a duty station beyond a reasonable commuting distance from the farm or home, as determined by the department, the department may waive the occupancy requirement for the period of such active service and for a reasonable period subsequent to the termination of such active service and consent to the leasing, letting, or subletting of the farm or home during such period or periods. 270.15. The purchase price of a home to the department shall not exceed fifty-five thousand dollars ($55,000) or, for members who qualify under subdivision (d) of Section 270.05, not to exceed seventy-five thousand dollars ($75,000), except that the purchase price of a mobilehome, as defined in subdivision (k) of Section 270.03, to the department shall not exceed thirty thousand dollars ($30,000), and a member purchasing the home may advance, subject to Section 270. 14, the difference between the total price or cost of the home and the sum of the purchase price of the home to the department and any amount the department is required under Section 270.19 to add to the purchase price of the home in fixing the selling price thereof to the member. Any amount of the purchase price to the department may be provided by funds from participation contracts or revenue bonds. The purchase price of a farm to the department shall not exceed one hundred twenty thousand dollars ($120,000), and a member purchasing the farm may advance the difference between the total price of the farm or cost of the dwelling and improvements to be constructed on a farm under a contract and the sum of such purchase price to the department or contract price to the department and any amount which the department is required under Section 270.19 to add to such purchase or contract price to the department in fixing the selling price of the farm to the member. 270.155. The maximum purchase price for a mobilehome which is to be sited in a mobilehome park as defined in Section 18214 of the Health and Safety Code, shall be twenty-two thousand five hundred dollars ($22,500), with an amortization period not to exceed 25 years. For purchases under the provisions of this section, the department shall charge a rate of interest one percent higher than that which is charged to purchasers of conventional housing or of a mobilehome sited on a lot owned by the purchaser. 270.156. A mobilehome which is purchased under this article shall not be moved from its original site to any other location, without first obtaining prior authorization from the department. Any person who moves or causes to be moved a mobilehome under this act, without first obtaining approval from the department, shall be jointly and severally liable to the department for the full amount of the mobilehome loan balance. 270.16. The department may acquire a farm in which the member to whom such farm is to be sold has theretofore acquired an interest. 270.17. Before the purchase of any property by the department there shall be filed with the department (1) an appraisement of the market value of the property by an employee or an authorized agent of the department or (2) in lieu of the appraisal by the department, the department may accept an appraisement of the market value of the property by either the Federal Housing Administration or the Veteran' s Administration, and in addition there may be filed with the department an appraisement of the market value of the property by an authorized appraiser of a banking corporation formed under the laws of this state or of a national banking association having a place of business in this state. Each appraisement shall be certified by the maker thereof. The certification shall state that it is made in good faith, and that the valuation is honestly determined and represents the bona fide opinion of the maker. 270.18. The department, before consummating a purchase under the provisions of this article, shall cause the title of the property sought to be purchased to be examined and may require for that purpose an abstract, an unlimited certificate of title, or a policy of title insurance, and may refer the same to the Attorney General for his opinion. 270.19. The department shall then enter into a contract with the member for the sale of the property to the member. The department shall fix the selling price of the property by adding to the purchase price thereof, to the total cost of improvements constructed, or to the value of such property as determined by the department when such property is acquired by the department in a manner other than by purchase, all expenses incurred and estimated to be incurred by the department in relation thereto, inclusive of interest, administration, appraisals, examination of title, incidental expenses, and the sum deemed necessary to meet unforeseen contingencies. In the case of real property acquired from a member for the purpose of constructing improvements thereon, the department shall forthwith after acquiring said real property enter into the contract with the member authorized by this section at a selling price determined by the amount of the contract price for the improvements and any of the other additions herein authorized. After the execution of said contract between the member and the department and the making of the initial payment thereon the department shall be authorized to pay the cost of the improvements contracted to be constructed on said real property, making progress payments thereon in such amounts and at such times as the department approves. The department shall upon written request of the member and his contractor have authority to approve additions to or deletions from the improvements contracted to be constructed and any savings affected or added cost incurred shall be deducted from or added to the amount due the department by the member under the terms of his contract. Where the department enters into a contract for the sale of property on trust land to an Indian member, the contract shall include the following conditions: (a) The dwelling house or other improvements contracted to be constructed on trust land shall be completed in compliance with the standards of the building code applicable on the trust land. If there is no building code in force on the trust land, the applicable standards shall be those of the building code of the county in which the trust land is located. (b) On the completion of construction, the Indian member shall provide to the department an inspection certificate from a qualified building inspector certifying that the dwelling house or other improvements comply with the standards of the building code as required by subdivision (a). 270.20. For the purposes of this article, any member who is under the age of 18 shall be deemed to be of the age of majority and to be an adult person for the purpose of entering into any contract for the purchase of a farm or home from the department or any other contract with respect to such property. 270.21. The purchaser shall make an initial payment of at least 5 percent of the selling price of the property. Purchasers of homes where the purchase price is equal to or less than fifty-five thousand dollars ($55,000) shall make an initial payment of at least 3 percent of the selling price of the property. The department may waive the initial payment in any case where the value of the property as determined by the department appraisal shall equal the amount to be paid by the department plus at least 5 percent where the purchase price is greater than fifty-five thousand dollars ($55,000). In the case of homes where the purchase price is equal to or less than fifty-five thousand dollars ($55,000), the department may waive the initial payment where the value of the property as determined by the department appraisal equals the amount to be paid by the department plus at least 3 percent. The balance of the purchase price may be amortized over a period fixed by the department, not exceeding 40 years for farms or homes, but not exceeding 25 years for mobilehomes, together with interest thereon at the rate as determined by the department pursuant to Section 270.37 for such amortization purposes. The purchaser on any installment date may pay any or all installments still remaining unpaid subject to the imposition of a prepayment charge which the department finds to be reasonable and necessary for the administration of this article. In any individual case the department may for good cause postpone from time to time upon terms as the department deems proper, the payment of the whole or any part of any installment of the purchase price or interest thereon. Each installment shall include an amount sufficient to pay the principal and interest on the participation contract to which the interest of the department is subject, and such amount as may be required by any covenant or provision contained in any resolution of issuance. 270.22. The provisions of Section 270.21, relative to the rate of interest to be charged to member purchasers do not apply to assignees of such purchasers who are not members, but as to such assignees the rate of interest shall be as fixed by the department, compounded at periods fixed by the department. 270.23. (a) Except as provided in subdivision (b), the department in each individual case may specify the terms of the contract entered into with the purchaser, but no property sold under the provisions of this article shall, voluntarily or involuntarily, by operation of law or otherwise, be transferred, assigned, encumbered, leased, let or sublet, in whole or in part, nor shall any mobilehome be removed from its original site, except in case of emergency where temporary removal is necessary to avoid potential damage, without the written consent of the department, until the purchaser has paid therefor in full and has complied with all the terms and conditions of this contract of purchase. (b) The consent of the department shall not be required where a member, alone or jointly with his spouse, transfers his interest in property which is the subject of a loan agreement with the department into a revocable trust established for the benefit of the member or of the member and his spouse. 270.24. The contract made between the department and purchaser shall provide that the purchaser maintain the farm or home as his place of residence and keep in good order and repair all buildings, fences, and other permanent improvements situate thereon and that the purchaser, if required, insure and keep insured against fire or other hazards, all buildings, fences, other permanent improvements, or crops on the property, loss, if any, under the policies therefor to be made payable to the department as its interest appears. Insurance shall be in the amount, with the insurance companies, and under the conditions specified by the department. 270.25. If the purchaser fails or neglects to pay, satisfy, and discharge at maturity all taxes and assessments, and all other charges and encumbrances which are a lien upon the property being purchased from the department, or any part thereof, and also all taxes and assessments levied or assessed upon the interest created by the contract of purchase of such property; or to keep the buildings, fences, other permanent improvements upon such property insured and in good order and repair, or to keep the crops upon such property insured; or to keep in good order and repair all buildings, fences, and other permanent improvements, situated upon such property; then, in such event, the department may pay, satisfy, discharge, settle, or compromise the taxes, assessments, charges, or encumbrances, or insure the buildings, fences, permanent improvements, or crops, or do the work and supply the materials necessary to keep the buildings, fences, and other improvements in good order and repair. All moneys so expended by the department shall be added to the selling price of the property and bear interest at the rate of interest designated in Section 270.21 from the date of expending the same, and shall be repaid by the purchaser to the department on demand. The department may amortize the repayment of such expenditures or permit repayment in installments upon the terms and conditions which it deems proper. 270.26. The department shall be the sole judge of: (a) The legality or validity of taxes, assessments, charges, or encumbrances, and the amount necessary to be paid in satisfaction or discharge thereof. (b) The amount of insurance to be placed upon the buildings, fences, other permanent improvements, and crops and the amount necessary to be paid for the premiums for such insurance. (c) The necessity and nature of the work necessary to keep the buildings, fences, and other improvements in good order and repair, and the amount necessary to be paid therefor. 270.265. In the event of the purchaser's failure to comply with the terms of his military obligation, the department may adjust the interest rate of the contract of purchase to the current market rate of interest for home purchase contracts or similar obligations, or may proceed in accordance with the provisions of Section 270.27. 270.27. In the event of a failure of a purchaser to comply with any of the terms of his contract of purchase or of his military obligation, the department may cancel such contract, and thereupon be released from all obligations, at law or in equity, to convey the property, and the purchaser shall forfeit all right thereto. All payments theretofore made shall be deemed to be rental paid for occupancy. Upon such forfeiture, the department shall take possession of the property covered by such contract, and shall remove all persons and personal property therefrom without any liability whatsoever on the part of the department or of any official or employee thereof for any damage or injury caused by or incident to the entry or removal. The failure of the department to exercise any option to cancel or to exercise any other privilege under such contract for any default shall not constitute a waiver of the right to exercise such option or privilege for any other default on the part of the purchaser. 270.28. (a) In the event of a forfeiture of a contract of purchase under this article, the department may sell or otherwise dispose of the property covered by the forfeited contract to any person and upon any terms and conditions as it deems proper. (b) Where the department elects in the event of a forfeiture to sell or otherwise dispose of an assignment of an Indian member's beneficial interest or of a leasehold interest in allotment trust land, the department shall first offer it for sale to the person or persons for whom the land is held in trust, including an Indian member having a beneficial interest in the land on which the forefeiture occurred, at a price equal to the unpaid balance of the contract price. If none of the persons for whom the land is held in trust accepts the offer, the department shall next offer it to the United States Secretary of the Interior at the same price. (c) Where the department elects in the event of forfeiture to sell or otherwise dispose of a leasehold interest in tribal trust land, the department shall first offer it for sale to the tribe for whom the land is held in trust at a price equal to the unpaid balance of the contract price. If the tribe fails to accept the offer, the department shall next offer it to the United States Secretary of the Interior at the same price. (d) Where all the parties to whom the department is required to offer the property under subdivision (b) or (c) fail to accept the offer, the department may sell or otherwise dispose of the property covered by the forfeited contract as provided by subdivision (a) and, so doing, the department shall give first preference to any good faith offer by a person approved by the tribal council of the reservation, rancheria, or land held under the jurisdiction of that particular tribal governing body on which the allotment land is sited. (e) If the property is subject to a participation contract, the department may, at its option, pay the balance due upon the participation contract, including accrued interest, without penalty. 270.29. The department may, in the contract of purchase with a member provide that, in the event of default by the member and forfeiture of the member's rights under the contract and subsequent sale of the property by the department, it may pay to the member any net gain realized by the department upon the sale. The department is the sole judge of the net gain. 270.30. The department may insure and keep insured against fire or other hazards all buildings, fences, other permanent improvements, or crops situated upon any property which has reverted to and is under the control of the department, or may do the work and supply the materials necessary to keep the buildings, fences, and other improvements situated upon the property in good order and repair. The department may lease or let the property, in whole or in part, upon such terms as it deems proper. In the case of a farm, the department may cultivate the farm or harvest the crop. 270.31. If illness or acccident prevents a purchaser of a farm from cultivating his farm or harvesting any crop, the department may enter and cultivate the farm or harvest the crop. In such event the department has a first lien upon the crop for all moneys expended and may sell the harvested crop. Out of the proceeds of the sale the department may reimburse itself for any expense which it has incurred in the cultivation of the farm, the harvesting of crops and the sale thereof, and retain any moneys due to the department from the purchaser. Any balance shall be paid by the department to the purchaser. 270.32. When a purchaser dies, indebted to the department under contract of purchase, his rights acquired under this article and such contract shall devolve upon his heirs, devisees, or personal representatives, but subject to all rights, claims, and charges of the department. Default on the part of an heir, devisee, or personal representative, with respect to any right, claim, or charge of the department shall have the same effect as would default on the part of the purchaser but for his death. 270.34. The right to declare a forfeiture for breach of a condition contained in any deed to real property may not be enforced as against the interest of the department in said real property or any portion thereof. 270.35. The department shall not acquire a home in which the member has an interest of record except in the following instances: (a) Where the application is for aid for the construction of a home upon unimproved real property owned by the applicant. (b) Where the member had no interest of record in the property at the time of filing his or her application and thereafter secured interim financing pending the processing and approval of the application by the department. (c) Where the application is to pay the balance due on an existing loan not insured or guaranteed by the federal government, and which bears an interest rate of more than 2 percent higher than the prevailing rate pursuant to this article. (d) Where the application is for purchase of a mobilehome to be situated upon real property, or an undivided interest therein, owned by the applicant. (e) Where the applicant is an Indian member and the application is for the construction of a dwelling house or other improvements on, or for the purchase of a mobilehome to be situated on, trust land in which the Indian member has a beneficial interest or owns an interest of record. 270.36. (a) Any member for whom a farm or home is purchased under this article may be granted a subsequent opportunity to purchase another farm or home if the farm or home purchased under this article is sold prior to payment in full of the contract obligation. The amount of any new loan shall not exceed the balance owing on the original purchase contract. (b) The provisions in subdivision (a) permitting a new loan shall apply only if the application for a subsequent loan is made within two years from the date of sale. (c) The department may impose a reasonable fee for processing a new loan pursuant to this section. 270.365. There is hereby created the California National Guard Finance Committee. The membership of the committee shall consist of the State Controller, the State Treasurer, the Director of Finance, the Commanding General of the State Military Forces, and the Director of Veterans Affairs. 270.37. (a) The department shall establish the actual interest rate to be paid. To this end the department, by a majority vote of California National Guard Finance Committee members, is empowered to establish the rate of interest payable upon the amount remaining unpaid under a member's purchase contract. All purchase contracts acquired with the proceeds of or otherwise allocable to a particular series of revenue bonds pursuant to the resolution of issuance of such bonds shall bear a uniform rate of interest. Unless otherwise provided in any resolution of issuance, all purchase contracts shall bear a uniform rate of interest without regard to the series of revenue bonds to which particular purchase contracts may be allocable. The California National Guard Finance Committee shall make a finding as to the rate of interest to be charged, determined by the actual cost of revenue bond sales, plus a certain percent for administrative costs to be determined at least annually by the committee, taking into consideration the current value of money and the solvency of the California National Guard Members' Farm and Home Building Fund of 1978, and the interest paid on participation contracts to which the interest of the department is subject. Subject to agreements contained in any resolution of issuance, the California National Guard Finance Committee may raise or lower the effective rate of interest payable under such contracts for any given period as many times and as frequently as it deems to be for the best interest of the department, as well as the contract holders, if in so doing its action is made applicable alike to any and all contracts allocable to a particular series of bonds, and 90 days' advance notice be given of the time when the new rate of interest is to become effective. (b) The total amount of any installment payment shall be raised or lowered to reflect a change in the effective rate of interest. The actual interest rate to be paid on the amount remaining unpaid under any member's purchase contract shall be a rate of interest which, when combined with the interest paid on the unpaid balance of a participation contract to which the department's interest is subject equals the effective rate of interest. 270.38. In the event the department enters into a master agreement with one or more insurance companies to provide life or disability insurance coverage for the purchasers of farms and homes from the department, the master agreement shall be a form of group life or group disability insurance for purposes of the Insurance Code and shall provide both that the group life insurance coverage offered under the master agreement will be offered by the insurance company or companies to purchasers with a military duty-related disability and nondisabled purchasers on an equal basis and that no purchaser shall be denied coverage under the group life insurance policy because that purchaser has a military duty-related disability at the time of application. 270.39. The action of a member purchaser for damages against any third party does not affect his right of action for all damages against any party other than the department. If the department indemnifies, or becomes obligated to indemnify, the member purchaser, it may likewise bring an action against any such third party responsible for damage to the contract property. In the latter event, the department may recover in the same suit all payments made on behalf of the member purchaser. If either the member purchaser or the department brings an action against such third party, the member purchaser or the department, as the case may be, shall forthwith give to the other written notice of the action and of the name of the court in which the action is brought, by personal service or registered mail. Proof of such service shall be filed in such action. If the action is brought by either the member purchaser or the department, the other may, at any time before trial on the facts, join as party plaintiff, or shall consolidate the action if brought independently. The court shall first apply, out of the entire amount of any judgment for any damage recovered by the member purchaser, a sufficient amount to reimburse the department for the amount of its expenditures for indemnification. If the department has not joined in the action or has not brought action, or if the action has not been consolidated, the court, on the department's application, shall allow as a first lien against the entire amount of any judgment for any damages recovered by the member purchaser, the amount of the department's expenditures for indemnification. 270.41. The department is authorized to issue to lenders or investors supplying funds for the program a participation contract. 270.43. Notwithstanding other provisions of this article relating to maximum sums to be expended by the department and maximum purchase price, the department may acquire or construct a home equipped with solar energy heating devices at a purchase price not in excess of five thousand dollars ($5,000) over the maximum amounts specified in Sections 270.10, 270.11, 270.15, and 270.155.
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