(a) (1) A local agency shall issue a building permit for one or more residential units that are part of a housing development project consisting of 10 or fewer units on a lot proposed to be subdivided as part of a subdivision pursuant to paragraph (3) if the applicant for the permit has met both of the following requirements:

(A) The applicant has received a tentative map approval or parcel map approval for the subdivision.

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(B) The applicant has submitted a building permit application that the local agency deemed complete pursuant to subdivision (b) of Section 65913.3.

(2) The local agency may condition the issuance of a building permit on the applicant submitting proof to the satisfaction of the local agency of a recorded covenant and agreement enforceable by the local agency that states that the applicant and the applicant’s successors and assignees agree that the building permit is issued on the condition that a certificate of occupancy or equivalent final approval for the building will not be issued unless the final map has been recorded.

(3) (A) The local agency shall issue the building permit based upon the tentative or parcel map and its conditions of approval. Any dedication, improvement, and sewer requirements identified in the approved tentative or parcel map or its conditions of approval shall be guaranteed to the satisfaction of the local agency at the time the building permit is issued.

(B) The local agency may require security to ensure faithful performance of the requirements identified in the approved tentative or parcel map or its conditions of approval. The amount of security shall be determined by the local agency and shall not be more than 300 percent of the total estimated cost of the improvements or of the acts to be performed. The security shall be provided in either of the following forms, as determined by the local agency:

(i) Bond or bonds by one or more duly authorized corporate sureties.

(ii) An instrument of credit from an agency of the state, federal, or local government when any agency of the state, federal, or local government provides at least 20 percent of the financing for the portion of the act or agreement requiring security, or from one or more financial institutions subject to regulation by the state or federal government and pledging that the funds necessary to carry out the act or agreement are on deposit and guaranteed for payment, or a letter of credit issued by such a financial institution.

(4) Notwithstanding paragraph (1), a local agency may deny issuance of a building permit if the building official makes a written finding, based upon a preponderance of the evidence, that construction of the proposed structure or structures before recordation of the final map would have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

(b) A local agency may adopt an ordinance to implement the provisions of this section. An ordinance adopted to implement this section shall not be considered a project under Division 13 (commencing with Section 21000) of the Public Resources Code.

(c) This section shall become operative on July 1, 2024.

(Added by Stats. 2023, Ch. 783, Sec. 3. (SB 684) Effective January 1, 2024. Operative July 1, 2024, by its own provisions.)