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01/16/2014
Page 1 Trust Extension approved; what it means

At a special meeting of the Golden Rain Foundation Board on Jan. 7, the GRF Board of Directors and fellow Shareholders observed the counting of 4,768 ballots on the Trust Extension. It took more than four hours for the independent inspector of elections, Accurate Voting Services, to count the ballots. The final tally was 4,642 yes votes, 84 no votes and 42 abstentions. 

The Golden Rain Trust is the corporate document that charges the GRF with specific tasks, such as handling the community’s assets and acting as the property management company for the Mutuals under a separate management contract. It was established with the governance system currently in use to protect and ensure the management of common areas, property and facilities. The Trust was created under a Declaration of Trust dated December 21, 1961, and recorded with the County in 1962. The Mutual corporations are the Trustor and beneficiaries. The GRF is the Trustee. 

The recent vote was an amendment to extend the Trust from 2024 to 2044 to avoid termination. The GRF Board of Directors and Mutual Boards of Directors previously approved and recommended this action. Now that the Trust extension has passed, the Foundation’s corporate attorney will file the paperwork for certification and ensure the records are updated with the County. 

With this showing of Community Unity, your voice was clearly heard in this successful vote, the community’s operation and management will continue uninterrupted until 2044, keeping what you know and love. 

Many, many people assisted with the Trust extension including the Trust Ad hoc Committee, chaired by Denis Craig, GRF and Mutual directors, building captains and staff. Volunteers went door-to-door to speak with their neighbors about the extension, and their efforts are truly appreciated.  

--Randy Ankeny, Executive Director


01/09/2014
Page 1: Trust Extension Vote Passes 

On behalf of the Golden Rain Foundation Board of Directors, I am pleased to announce that the Trust extension measure passed.  Over 4,700 ballots were counted at a special GRF Board meeting on Tuesday, Jan. 7, in Clubhouse 4.  

Ballots were mailed to all Foundation members, just over 6,600 households. A quorum of 2,203 members, or 33-1/3 percent of the membership, was required before the ballots could be counted. Fifty-one percent of the membership, or 3,305 yes votes, was needed to pass the proposed Trust extension.  Accurate Voting Services served as the inspector of elections and announced the final tally:  4,642 yes votes; 84 no votes; and 42 abstentions or quorum-only votes.    

I extend my sincere thanks to the Foundation members for their participation in this election.  You have voted to keep what we know and love. Thanks also to the volunteers for their efforts; you are a true example of COMMUNITY UNITY!

Further information on the election and what this vote means will be published in next week’s edition of the News.

--Mario Michaelides, GRF President



01/02/2014
Page 1: Trust Ballots Counted Jan. 7

On behalf of the Golden Rain Foundation Board of Directors, I am pleased to announce that Accurate Voting Services (the Board-appointed, professional Inspector of Election) has received over 4,500 Trust Extension Ballots. Thank you to those members who have submitted their ballots! To those who haven’t, it is not too late to mail your ballots, and we ask that you do so as soon as possible.  

A board meeting is scheduled for Tuesday, Jan. 7, 2014, at 9 a.m. at which time Accurate Voting Services will tabulate the ballots and announce the vote results. The meeting will be held in Clubhouse 4 in public view, as required by law. Foundation members may turn in their ballots or vote in-person on Jan. 7 between 8:30-9 a.m. at which time the polls will close, and the ballot counting will start.

The counting will take approximately three hours. The election results will be published in next week’s edition of the News.  

Again, if you haven’t mailed your ballot in, please do so as soon as possible!

--Mario Michaelides, GRF President



11/21/2013
Page 1: Trust Extension: Vote Yes

It is now time to vote “YES” on extending the Golden Rain Foundation Trust for an additional 20 years. Our overwhelming “YES” vote will enable us to continue to enjoy our wonderful park-like community for many years to come. You should have received  your GRF Trust extension ballots by now.

In other Trust news, the “GRF Trust Extension Frequently Asked Questions” section of the Leisure World website has been recently updated. To access the information, go to www.lwsb.com, and click on the “Community Unity Trust Extension” graphic (see above). Look for “Frequently Asked Questions,” and click.

—Carole Damoci and Lucille Findlay, GRF Trust Extension Committee




10/31/2013
Page 1: Trust Extension: Vote Yes
It’s almost November. Awareness is growing. The overwhelming vote necessary to continue our lifestyle, stability and property value looks possible.

Will your mutual be the first to reach 75% of shareholders voting?

If you or someone you know is leaving for another town or country and won’t be back in time to vote, be sure GRF Board Secretary Courtney Knapp receives the “Trust Ballot for Traveling Residents” coupon on page 2 of this edition.  It can be dropped in a white mailbox or at Administration.

—Carole Damoci and Lucille Findlay, GRF Trust Extension Committee



10/24/2013
Page 1: Trust Extension: Vote Yes


It’s almost November. Awareness is growing. The overwhelming vote necessary to continue our lifestyle, stability and property value looks possible.

Will your mutual be the first to reach 75% of shareholders voting?
If you or someone you know is leaving for another town or country and won’t be back in time to vote, be sure GRF Board Secretary Courtney Knapp receives the “Trust Ballot for Traveling Residents” coupon on page 2 of this edition.  It can be dropped in a white mailbox or at Administration.
—Carole Damoci and Lucille Findlay, GRF Trust Extension Committee




10/17/2013
Page 1: Trust Extension: Vote Yes

In two short weeks it will be time to vote “YES” on extending the Golden Rain Foundation Trust for an additional 20 years. Our overwhelming  “YES” vote will enable us to continue to enjoy our wonderful park like community for many years to come.

—Carole Damoci, Lucille Findlay, GRF Trust Extension Committee



10/10/2013
Page 1: Trust Extension: Vote Yes

Just three weeks until you cast your “YES” vote to extend the Golden Rain Foundation Trust. It’s the most important vote you’ll cast to assure the future stability of our community.
  • Vote “YES” to extend the Trust for 20 years with no change. 
  • Vote “YES” to continue our comfortable lifestyle.  
  • Vote “YES” to guarantee a firm foundation for future sales. 
We need the largest voter turnout ever to achieve a 3,305 “YES” vote.

—Carole Damoci  Lucille Findlay, GRF Trust Extension Committee


 

10/3/2013
Page 1: Trust Extension: Vote Yes

We will vote on extending the GRF Trust Nov. 1. How do we reach 3,305 “YES” votes?
  • First, send in your ballot. If it doesn’t arrive by Nov. 5, call Accurate Voting at (855) 588-5522.
  • Next, check to be sure your Leisure World friends and neighbors received their ballots and voted.  
  • Then contact neighbors who receive mail at another address. If they don’t receive a ballot, accurate voting can send one.
  • Finally, contact powers of attorney or family members of those who need their assistance.
We must all complete this most important task. It will assure the future of our community. 

—Carole Damoci, Lucille Findlay,  GRF Trust Extension Committee



9/26/2013
Page 1: Trust Extension: Vote Yes

The time to cast your “YES” vote for the extension of the Golden Rain Foundation Trust is fast approaching. The ballots will be mailed Nov. 1.

Talk to your neighbors and Leisure World friends about the importance of everyone sending in their ballots. We must have the largest voter turnout ever to achieve a 3,305 “YES” vote.

After the “YES” votes of the majority of GRF members have been counted, we can celebrate the assured continuation of our special way of life. 

 —Carole Damoci, Lucille Findlay, GRF Trust extension Committee



9/19/2013
Page 1: Trust Extension: Vote Yes

Have you stopped by Administration to pick up a copy of the Golden Rain Foundation Trust? It’s the glue that holds our community together.

You’ll receive your ballot Nov. 1. After reviewing the accompanying information, mark the box by the “YES.” Follow the mailing instructions carefully and drop your Golden Rain Foundation Trust Extension Ballot in the U.S. Mail.

Once the “YES” votes of the majority of GRF members have been counted, we can rest assured that our special way of life will continue well into the future.

—Carole Damoci, Lucille Findlay, GRF Trust Extension Committee



9/5/2013
Page 1: Trust Extension: Vote Yes

In two short months, it will be time to vote “YES” on extending the Golden Rain Foundation Trust for an additional 20 years. Our overwhelming  “YES” vote will enable us to continue to enjoy our wonderful park-like community for many years to come. 

—Carole Damoci and Lucille Findlay, GRF Ad Hoc Trust Extension Committee



8/29/2013
Page 1: Trust Extension: Vote Yes

Nine weeks until you cast your “YES” vote to extend the Golden Rain Foundation Trust. It’s the most important vote you’ll cast to assure the future stability of our community.
  • Vote “YES” to extend the Trust for 20 years with no change. 
  • Vote  “YES” to continue our comfortable lifestyle.  
  • Vote “YES” to guarantee a firm foundation for future sales. 
We’re all counting on you. Everyone must vote “YES.”

—Carole Damoci and Lucille Findlay, GRF Ad Hoc Trust Extension Committee



8/22/2013
Page 1: Trust Extension: Vote Yes
by Carole Damoci and Lucille Findlay
GRF Ad Hoc Trust Extension committee members

Our community as we know it today exists because it’s built on a firm foundation, the GRF Trust. Have you picked up your copy from the bookcase in the lobby of the Administration building? Read the first Recital. The primary purpose of the Foundation is to provide services and community facilities. All of us benefit from living in this unique community. It has developed through the years on the firm foundation our Trust provides. 

Drop us a line.  Tell us what you love about life in our community.  Address your envelope to the GRF Ad Hoc Trust Committee and put it in a white mailbox. No postage is necessary. 

Trust extension ballots will be mailed November 1.  Vote “YES” to ensure the continuation of our special lifestyle many years into the future.



8/15/2013
Page 1: Trust Extension: Vote Yes

The Golden Rain Trust will terminate in just a few years. We need to extend the Trust. A Trust committee along with specialized attorneys have reviewed the Trust extension over the past three years.  All of the Mutual Boards and the GRF Board have unanimously voted “YES,” extend the Trust. 

The Trust extension will:
  • Continue our wonderful life style
  • Make no change to the existing GRF Trust other than an extension of 20 years
  • Guarantee a firm foundation for future sales
Pick up a copy of the Trust. They’re available in the lobby outside of Stock Transfer in the Administration building. If you have questions, drop us a line. Address your envelope to the GRF Ad Hoc Trust Committee and put it in a white mailbox. No postage is necessary. Questions will be answered in future articles.

Ballots will be mailed out in November.  Be first to vote “YES” when the ballots arrive.

—Lucille Findlay, Carole Damoci,, GRF Ad Hoc Trust Committee members



8/8/2013
Page 1: Extend the Trust with a ‘yes’ vote

A Trust is a legal relationship where property is held by one entity (the Trustee) for the benefit of another (the Trustor). In order to finance the building of the common use facilities, the original developer, Ross Cortese, was required to form a trust that would ensure that the mutuals would have rights to the common lands and facilities. This requirement was made by the federal agency HUD, and the bank that lent the money for development.

On July 10, 1962, a Declaration of Trust was set up between the Golden Rain Foundation and Mutual 1. At that time Mutual 1 transferred $762,745 into an account called the “original Trust Fund.” As the other Mutuals were built, each Mutual transferred various sums of money into the “original Trust Fund” and were adopted as additional Trustors. GRF, as Trustee, bought 540 acres and over the next few years, gave title of all the parcels to the mutuals but kept legal title to all common use parcels and street acreage. GRF owns and must maintain the improvements for the benefit of the mutuals. So the amenities shareholders enjoy, that is the swimming pool, the golf course, the clubhouses, the gates, the streets, etc., are maintained by GRF for their benefit. 

The GRF Trust is due to end in 2024. 

If the trust is allowed to run out in 2024, GRF will no longer exist as a Trustee. The Mutuals would have to devise a new plan to manage the common facilities and the staff. And every decision regarding a new plan would require a unanimous vote by all 16 mutuals.    

According to new Trust Law, the Trust can be extended for 20 years, which would bring Leisure World to 2044. 

This system has worked for over 50 years. 
Let’s keep it going. 
Vote “Yes” to extend the Trust.    

—Betty Coven and Martha Destra


                                          
8/1/2013
Page 1:  Extending Trust will maintain LW community
by Martha Destra
LW contributor

The unique arrangement of common areas managed by a board of directors who are both residents and elected directors has helped to keep Leisure World Seal Beach affordable. Golden Rain Foundation directors, like mutual directors, work for the community as volunteers. If all the work they do had to be done by a paid management company, LW assessments would need to be higher.

All together there are about 120 directors in the Golden Rain Foundation and the 16 mutuals. True, they don’t work regular work weeks, but many have served more than eight hours in a single day, and many have worked during weekends.

By some estimates, LW would need at least 80 more full-time employees if it did not have dedicated directors.

The GRF Trust sets up the arrangement where the mutual corporation directors take care of their mutual assets. And the GRF directors oversee and advise the Golden Rain staff and common facilities. This year shareholders will need to vote to extend that Trust because it is a governing document. The extension will cover the years 2024 to 2044. During the extended period, a new plan to keep this lovely community for future residents can be devised.

The issue will be covered in a program to air on local television.

Both sides will be covered. Shareholders who oppose the trust extension and who would be willing to be interviewed for the program should contact Martha Destra at 431-6368 or Joe Osuna at 430-0389.common facilities. This year shareholders will need to vote to extend that Trust because it



7/25/2013
Page 1: Trust adoption will lead to less chaos

The Golden Rain Trust will terminate in just a few years (2024). The Trust Document ensures our “continuance” of Leisure World and our “occupancy” of apartments. Without the Golden Rain Trust in place, then secure business as usual will be disrupted and, according to the Trust Attorney, “chaos” will ensue.

A Trust Committee reviewed the trust issue over the past three years with a specialized trust attorney, and due to a change in the law, the GRF Trust can be renewed and extended for a total of 90 years from inception. The process mandates extensions in 20 year increments.

By shareholder approval passing this trust extension, the GRF Trust will be good until 2044 securing the our lifestyle and securing investments and property values. 

What are the benefits of extending the existing GRF Trust?
  • Our GRF Trust is finely written and has served the shareholders and the Leisure World community extremely well for the last 50 years.
  • Preserve self-government and the GRF Trust will serve the Leisure World community just as well for the next 20 years (2024-2044).
  • Prudent—No need to reinvent the wheel when the GRF  Trust as it is, is well written and prudently thought out.
  • Continue the great Leisure World lifestyle, provides security and peace of mind, nothing changes accept the 20 year extension of valuable time, that’s all.
  • Cost Savings — No need spending possibly hundreds of thousands of dollars with attorneys re-writing a new Trust.
  • There are NO changes to the existing GRF Trust other than an extension of 20 years and then it can be renewed again for another 7-year term until 2051 if future boards of the Mutual Corporations choose.
  • The GRF Trust needs to be extended and secure for the “protection” of the shareholder investments, property values and our great lifestyle.
  • If the GRF Trust is not renewed then it will terminate in 2024.
  • Property values will DROP. The closer we get to 2024 the property values will drop as the property will not and possibly cannot be sold by the realtors.
  • Why? The Trust is a governing document and must remain secure and in force at all times. If not in place then no one will or can buy in Leisure World.
  • Considering these benefits it is extremely important the Golden Rain Trust is extended. Funds have been appropriated over the past three years obtaining the advice and opinion from specialized Trust attorneys on the best course of action.
  • Not approving the GRF Trust Extension will severely impact the shareholder investments and the ensuing “chaos” if not resolved will destroy Leisure World as we know it.
The Mutual Boards, Mutual Directors and GRF Board have signed approval of the Trust Extension and recommend ALL shareholders

Vote YES Approving Extending the GRF Trust.

Special Ballots will be mailed shortly and must be voted and returned in the approved and supplied return envelopes.

Shareholders, your YES VOTE is the most important vote you will make preserving and extending the “great” Leisure World Community.



7/18/2013
Page 1: Trust has protected LW property for 50-plus years

A Trust is a legal relationship where property is held by one entity (the Trustee) for the benefit of another (the Trustor). In order to finance the building of the common use facilities, the original developer, Ross Cortese, was required to form a trust that would ensure that the mutuals would have rights to the common lands and facilities. This requirement was made by the federal agency HUD, and the bank that lent the money for development.

On July 10, 1962, a Declaration of Trust was set up between the Golden Rain Foundation and Mutual 1. At that time Mutual 1 transferred $762,745 into an account called the “original Trust Fund.” As the other Mutuals were built, each Mutual transferred various sums of money into the “original Trust Fund” and were adopted as additional Trustors. GRF, as Trustee, bought 540 acres and over the next few years, gave title of all the parcels to the Mutuals but kept legal title to all common use parcels and street acreage. GRF owns and must maintain the improvements for the benefit of the Mutuals. So the amenities shareholders enjoy, that is the swimming pool, the golf course, the clubhouses, the gates, the streets, etc., are maintained by GRF for their benefit. 

The GRF Trust is due to end in 2024. If the trust is allowed to run out in 2024, GRF will no longer exist as a Trustee. The Mutuals would have to devise a new plan to manage the common facilities and the staff.  And every decision regarding a new plan would require a unanimous vote by all 16 mutuals.    

According to new Trust Law, the Trust can be extended for 20 years, which would bring Leisure World to 2044. This system has worked for over 50 years. Let’s keep it going. 
Vote “Yes” to extend the Trust.    



7/11/2013
Page 1: Extending Trust will maintain LW community
by Martha Destra
LW contributor

The unique arrangement of common areas managed by a board of directors who are both residents and elected directors has helped to keep Leisure World Seal Beach affordable. Golden Rain Foundation directors, like mutual directors, work for the community as volunteers. If all the work they do had to be done by a paid management company, LW assessments would need to be higher. 

All together there are about 120 directors in the Golden Rain Foundation and the 16 mutuals. True, they don’t work regular work weeks, but many have served more than eight hours in a single day, and many have worked during weekends. 

By some estimates, LW would need at least 80 more full-time employees if it did not have dedicated directors. The GRF Trust sets up the arrangement where the mutual corporation directors take care of their mutual assets.  And the GRF directors oversee and advise the Golden Rain staff and common facilities. This year shareholders will need to vote to extend that Trust because it is a governing document. The extension will cover the years 2024 to 2044. During the extended period, a new plan to keep this lovely community for future residents can be devised.  

The issue will be covered in a program to air on local television. Both sides will be covered. Shareholders who oppose the trust extension and who would be willing to be interviewed for the program should contact Martha Destra at 431-6368 or Joe Osuna at 430-0389.



7/4/2013
Page 1: Committee’s Goal is to get all LWers to vote for Trust

At its first meeting since the Mutual and GRF elections, the Ad Hoc Trust Committee set out a program to prepare for the election to ratify the extension of the Golden Rain Foundation Trust. The committee members plan to spend July, August and September educating shareholders about the significance of the Trust, so they are prepared to vote in October. The 16 Mutual Boards have already ratified the Trust extension, but the entire membership must also affirm the vote because the Trust is a governing document.

The goal is to get 3,305 positive votes. That represents one-half of the total units. According to the advice of Paul Marx, the attorney helping with the Trust extension, there are no cons to extending the trust.   

The difficult task will be to get everyone to mark their ballots and send them back. So the committee is planning many activities to get information to all shareholders before the ballots are sent. Watch the Golden Rain News for more information.   

Organizations or clubs that would like someone to explain more about the GRF Trust should contact Ad Hoc Trust Committee Chairwoman Martha Destra, 431-6368, and she or another committee member will arrange to attend the meeting.  

—Martha Destra, chair, Trust Ad Hoc Committee



4/25/2013
Page 8: GRF Trust was topic at April meeting
by Vic Gendrano
LW contributor 

The Filipino Association of Leisure World (FALW) held its monthly meeting April 14 in Clubhouse 3.

FALW President Ric Dizon introduced Sandra Tappen and Carol Franz as the guest speakers. The subject of their informative lecture was the Golden Rain Foundation Trust. They explained shareholder rights and benefits upon the termination of the Trust”on 2024.
 
A proposed amendment will extend the date to 2044, but in any case the trust will terminate in 2051 because of a so called “Rules Against Perpetuities.” According to Ms. Tappen and Ms. Franz, shareholders have the right to vote for the Trust Extension. It was recommended that members vote for the extension.

After Ms. Tappen and Ms. Franz left, Mr. Dizon continued the meeting. Invocation was lead by Fortune Revilla. Last month’s meeting minutes were read by Myrrha Villanueva. Gloria Pellicer gave short report on the healthy financial situation of the association. Vito Villamor, vice-president of FALW, extended his gratitude to the officers and members for their dedicated support to forthcoming biennial celebration of the Multi-Cultural Council on Oct. 12. 

FALW will perform two cultural dances and a medley of Filipino folk songs under the tireless direction and choreography of Pat Erickson and her assistant, Lito Jeremillo.

The May meeting was moved a week earlier, May 5, same time and place, because of Mother’s Day celebrations. Most members opted to be with their families on that day.

Snacks for the last meeting were provided by Group II, headed by Reddy de Guzman.

Birthday celebrants of the month were Tilly Stiers, Angie Pellicer and Mila Michelson.




3/21/2013
Page 1 Story: Trust Extension is topic March 27

The Golden Rain Foundation (GRF) Ad Hoc Trust Committee will hold a town hall meeting on extending Leisure World’s trust agreement at 10 a.m., Wednesday, March 27,  in Clubhouse 4. 

The purpose is to help GRF members understand the critical need for getting more than 50 percent of the 6,608 members to vote “yes” on the upcoming ballot measure to extend the Declaration of Trust. 

This document requires the Trustee, which is the Golden Rain Foundation, to provide services and furnish community facilities (Leisure World clubhouses, streets, etc.) to the 16 mutuals that are the trustors and beneficiaries and Leisure World residents. 

Without the proposed 20-year extension, the trust will expire in 2024. If that happens, “the consequent disorder and confusion will very likely cause Leisure World to deteriorate and the values of the separate property interests to decline,” said Trust Attorney Paul Marx. With the extension there will be time to plan toward a positive future for the LW community.

Come to the trust extension town hall meeting to become informed voters and help neighbors become better informed too. There will be refreshments.

—Sandra Tappan



1/17/2013
Page 1 Story: GRF Town Hall meeting is on Jan. 23, CH 1

The GRF ad hoc Trust Committee will hold an important Town Hall Meeting on Wednesday, Jan. 23, at 10 a.m. in Clubhouse 1. The purpose is to help shareholders understand the critical need for getting more than 50-percent of the 6,608 GRF members to vote “yes” on the upcoming ballot measure to extend the Declaration of Trust. This document requires the Trustee, The Golden Rain Foundation, to provide services and furnish community facilities (Leisure World clubhouses, streets, etc.) to the 16 mutuals that are the trustors and beneficiaries and all of shareholders who live in Seal Beach Leisure World.

Without the proposed 20-year extension, the Trust will expire in 2024. There won’t be much chance to prevent the prediction of Trust Attorney Paul Marx from coming true: “The consequent disorder and confusion will very likely cause Leisure World to deteriorate and the values of the separate property interests to decline.” With the extension there will be time to plan toward a positive future for our community.

Come to the Trust Extension Town Hall to become an informed voter and help neighbors become better informed, too. There will be refreshments.



11/15/2012
GRF President’s Column: Extending the trust will keep the LW community intact
by Tim Bolton
GRF President

There has been a lot of discussion lately about extending “The Trust.”  So here’s a primer on what that means… in simple form, I hope! 

Our complex is made up of residences and common areas (streets, library, golf course, clubhouses and more).  Mutuals are corporations that own the residences. 

Each of us owns one share of our mutual corporation. Common areas are owned collectively by the mutuals. But how do the mutuals run the common areas?

Lenders and the FHA told the mutuals in the early 1960s to put all these common areas into a trust so that no one mutual can break off and do what they want with their portion of the common areas.

So the common areas were put in a trust for the beneficiaries (mutuals) and they became the trustors. The Golden Rain Foundation was created in the trust to operate and maintain these common areas and became the trustee. Nice package and the common good is maintained for all the shareholders. 

Trusts are created with a specific life. Ours expires in 2024. It can be extended for 20 years until 2044. 

If the trust expires (is not extended), the trust dissolves, and the common areas are distributed to the mutuals who can then independently do what they want with their assets, including selling them off.  

Can you imagine what could come of that? Can you imagine anyone buying an apartment or condo knowing that a selling free-for-all will occur in 2024 and no prediction of the result? 
Extending the trust will keep our community intact as it has been and our homes there for us. 
The GRF board of directors must approve this, the mutual boards of directors must approve this and shareholders must approve by majority vote. For every good reason, we need your voting participation and agreement to extend the trust. 

In the months ahead there will be efforts to accomplish the extension. 



9/27/2012
Guest Column: Why is it so important to extend the GRF trust?
By Dave Lyon
Mutual 3

A “guest column” in the Sept. 13 issue of the Golden Rain News with the heading “A better understanding of why LW has a trust” failed to deliver on that statement.
 
Extending the Declaration of Trust agreement (the “GRF Trust”) between the Golden Rain Foundation and each of the Seal Beach mutual corporations is certainly a vital subject. Moreover, it is absolutely vital that the trust be extended for another 20 years as has been proposed by the LW Presidents’ Council and supported by GRF.  

The GRF Trust, wherein GRF is trustee and the mutuals are trustors, is the “glue” binding together all that comprises LW Seal Beach.

The Declaration of Trust agreement is the primary “governing document,” and it is the “Declaration” that established LW as a “common interest development” as defined by Civil Code Sections 1351(c), (h) and (j) and 1353, as ruled by the courts in the case of “Golden Rain Foundation v. Carol Franz, et al.” in their decisions.  

After stating, “Mutuals 1-12 and 14-15 are not non-profit corporations… “ and adding “They are general law corporations...” the author goes on to provide incomplete and inaccurate information.  It is important to provide historical context here to understand why the trust is vital to the continued viability of LW.  

In the late 1950s when LW was being planned, stock-cooperatives were virtually non-existent in California. All forms of “common interest developments” were rare in the state at that time, though today they number more than 40,000. More importantly, the state did not have statutes in place that adequately addressed either stock-cooperatives or common interest developments.  

There was no Davis-Stirling Act prior to 1985, and no “Nonprofit Mutual Benefit Corporation Law” prior to 1987. The only thing “unique” about LW Seal Beach is that it was the first community of its kind built in the western United States, and the first to bear the name of “Leisure World.”  

Cortese transferred the deed for all of LW’s acreage to the GRF, which then sold the land necessary to build the residential buildings to the mutuals, while retaining title to “trust property.” The 21.96 acres of “trust property” and 59.77 acres of trust streets are listed in GRF Policy 5041.  

There is no practical means for that property to be equitably divided among the mutuals. Trust streets provide the community with roadways for transportation, and include utilities infrastructure buried under them.  A part of a street disconnected from the integrated network would be dysfunctional.   

If the existing trust were to expire, it would be necessary for all mutuals to merge into a single association or create a new trust.

Either action would incur large legal expenses and likely trigger a property tax reassessment resulting in increased monthly carrying charges up to $130 per month per unit or more. That is why it is vital to extend our existing Trust for another 20 years.



9/13/2012
Guest Column: A better understanding of why LW has a trust
by Graham McAllister
Mutual 9

At the President’s Council on Aug. 2,  GRF Executive Director Dan Schaeffer said he will be able to bring some firm information to the Sept. 6 council regarding the trust extension. As few of us have ever seen the trust and fewer know why it exists, I present this information so we can better understand this vital subject.      

The short answer is that the federal government required us to have one.  

The mortgages for mutuals 1-12 and 14-15 were insured by the Federal Housing Administration (FHA, now HUD)  under Section 213 of Title II of the National Housing Act as mentioned in the Articles of Incorporation for those mutuals.  

FHA was formed in 1937 as one of the entities created in the Roosevelt administration such as the WPA, NRA and CCC.  

HUD literature describes Section 213 as providing mortgage insurance for cooperative housing as follows:  “Section 213 insures mortgages loans to facilitate the construction and purchase of cooperative housing projects. Each member shares in the ownership of the whole project with the exclusive right to occupy a specific unit and participate in project operations through the purchase of stock.”  

The HUD literature further describes the eligible borrowers as:  Non-profit cooperative ownership housing corporations or trusts are eligible to use Section 213. They may either sponsor projects directly, sell individual units to cooperative members, or purchase projects from investor-sponsors.  

Note the wording “non-profit cooperative ownership housing corporations…”  Mutuals 1-12 and 14-15 are not non-profit corporations as defined by the California Corporations Code.  They are general law corporations sometimes referred to as “for profit corporations.” FHA only dealt directly with nonprofit corporations. “For profit corporations” had to form a trust to qualify for mortgage insurance.  The Trustee of the Trust had to be a non-profit corporation. The mutuals never dealt with FHA (HUD) directly.  All communication and correspondence was through GRF, the trustee.  

Leisure World is unique among the tens of thousands of common interest developments in California in that it has a trust. The only reason we have a trust is that it was a requirement of FHA. The Trust had four signatures:  FHA, United California Bank , GRF and Mutual 1.  Mutuals 2-12 and 14-15 executed an instrument of adoption to join the trust as they were formed.  

Mutual 16, built by Ross Cortese with private financing, also joined the trust. Mutual 17 has a separate trust. In this case, there are only two principals to sign the trust, the GRF and Mutual 17. The bank and FHA were not involved.  

Since the mortgages have been paid off, only GRF and the mutuals are now parties to the trust.  FHA and the banks have no interest in the trust since the loans are paid off.  

Now we need a reasoned article about why we need to continue with the trust and why it needs to be extended. All members of GRF need this information so we can understand what is happening to this crucial matter.

 
 
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